C&W shareholders on board with merger
It may not have the blessing of regional regulators and even consumers at this stage, but shareholders of Cable & Wireless Communications (CWC), the parent company of LIME, today voted overwhelmingly in favour of the merger with Columbus International Inc., operator of the consumer brand, Flow.
Following the November 4, 2014 announcement of the telecommunications mega deal worth over US$3 billion, shareholders attended a general meeting in London and demonstrated their support by voting almost nine to one in favour of the merger.
“I speak for the whole Board when I say that we are very pleased we have received shareholder approval for this acquisition which will significantly enhance CWC’s growth profile and accelerate the progress towards each of the strategic goals we unveiled in May. It will also create a fully converged telecommunications business which, with the support of host governments and regulators, will provide the Caribbean with leading edge communications capabilities that will be as good as anywhere in the world,” said CWC Chairman Sir Richard Lapthorne, in welcoming the vote.
The development follows a meeting of Eastern Caribbean telecoms ministers in Castries, St Lucia yesterday at which they expressed concern that the proposed amalgamation would create a monopoly in terms of the provision of fixed network services.
“We have agreed to join with the Telecommunication Authority of Trinidad and Tobago in the conduct of an analysis to see how this impact on our region and how we can ensure the rights of our consumers are safeguarded, that prices do not go up, that access to services that are affected primarily by this merger, which is fixed broadband, subscriber cable television and fixed telephony that those prices don’t go up,” Host minister Dr James Fletcher said.
He said the ministers of the Organisation of Eastern Caribbean States (OECS) were also seeking to ensure that the choices available to consumers were not eroded “and that there is a continuation of fair play in the telecommunication sector”.
Last month, the Eastern Caribbean Telecommunications Authority (ECTEL) had warned that both CWC and Columbus Communications could be in breach of their licences if they engaged in activities, which could unfairly prevent, restrict, or distort competition.
The sub-regional regulator also said that after reviewing the preliminary information available on the planned purchase, under the current regulatory regime, telecommunications licence holders, including CWC and Columbus, may be in breach of their licences.
“The decision to combine business by the two companies can have a negative impact on the telecoms sector and this has provided further impetus for the revision of existing legislation and rules governing competition in the sector, including the proposed new Electronic Communications Bill,” the ECTEL statement read in part.
Some concern has also been expressed in the sub-region that if the deal goes through the two entities would need to apply for new licences to operate.
However, in its statement today Phil Bentley, CWC’s chief executive officer said: “We know we have to work closely with governments and regulators to ensure that our customers benefit and that competition is not compromised – and that’s a commitment we’ve happily made to all our stakeholders; a commitment we intend to uphold.”
“In the discussions we have already had with governments and the regulators, we have emphasised our belief that this transaction will be good for bringing further investment to our markets. The merger is good for our employees, the communities we serve and, most importantly, our current and future customers,” he said.
CWC pointed out that “the combined business of CWC and Columbus International will deliver broader pro-consumer product offerings and improved services; inject state of the art TV and next-generation super-high-speed broadband technology into the combined business; deliver huge opportunities to the Business and Government sectors and provide rapid lead in fixed mobile convergence through a premier network platform”.
The company also said the combination of the two companies was consistent with global industry trends where convergence of fixed and mobile networks, increasing content consumption growth, and continuing development of online applications are driving requirements for higher bandwidth, fixed line networks and TV capabilities.