Cable & Wireless is out, Liberty Global is in
Cable & Wireless, the company that operates here as Flow, is no more.
The American, British-based telecommunications giant Liberty Global today announced that it has completed the acquisition of Cable & Wireless Communications (CWC) in a transaction valued at approximately US$7.4 billion on an enterprise value basis.
However, officials of the company say it will be business as usual in Barbados and the rest of the region, at least “for the time being”.
Making the official announcement this afternoon in a conference call at the Flow Warrens, St Michael office, Chief Executive Officer of Liberty Global Michael Fries told journalists the track record and power of both companies would only result in good opportunities for the region.
Fries said he was confident it was the right time for the acquisition, describing CWC as a “very well run company” and “a perfect fit” for Liberty Global.
“We felt this was the right time to develop scale in our industry. It is very important given the competitive environment, to add great scale,” he said.
“Just as importantly it is a great management team and it is a part of the world that need investment and innovation. If we look at mobile data penetration, broadband penetration, telephony penetration or smartphone penetration in Latin America and the Caribbean and compare it to Europe or the US, it is clear that there is great opportunity to bring investment and innovation to this region of the world and we are excited to do that,” he said, pointing out that Liberty Global was a “big investor” in infrastructure and technology.
The deal was first announced in November last year but at a value at US$5.3 billion, including CWC’s net debt, which was about US$2.7 billion as of September 30, 2015.
This came less than a year after CWC completed its acquisition of Columbus International Inc. Following that merger the company embarked on a rebranding of the company to operate in the region under the Flow brand.
“We expect it to be business as usual. We have to give ourselves sufficient time to get better acquainted to make sure we have our strategies and our approaches to growth aligned. And so for the time being I would say, for months, you are not going to see much meaningful change. I think it is going to be business as usual,” Fries said in response to a question from Barbados TODAY.
“For employment and infrastructure I will simply say that we intend to look at each market independently and try to figure out what the right technology solution is. In the case of Barbados fibre to the home, could that be the right solution? And I think that is something we will look at very closely, but we want to look at each market separately. It is not one size fits all in this business,” he added.
He described Barbados as a very unique market, adding that he wanted to make sure the investments being proposed for the county were “perfect” for the environment and for customers.
Fries could not immediately say over what period of time the integration would take place or exactly how much investment would be coming to the region as a result. However, he gave the assurance that additional investment in the region was “our number one priority”.
The Liberty Global executive added that typically his company would invest between 20 and 25 per cent of revenue into its network and technology aspect of the business.
However, he boasted that the majority of the investment was usually geared towards improving and upgrading networks and services, which would be no exception for the region.
One of the major changes in the short term will be the exit of Phil Bentley, who is now the outgoing chief executive officer of CWC. John Reid is the interim CEO. Reid was previously president of CWC’s consumer group.
Reid described the Barbados market as an interesting one, pointing to the level of investments and upgrades over the years.
He said the company would continue to focus on its “consolidated call centre” for the region, adding that a “revamp in customer focus, retail stores and new products and services especially on the video side” were also on the cards.
“So I think really Barbados, we have got to step up in terms of where we are. The customers will see improved levels of service regardless of what key performance indicators that we will be judged on and new products and services,” said Reid.
Reid said he expected the company’s customer base to grow significantly in the region as it rolled out new products and services.
“That will largely drive the investment strategy,” said Reid.
Liberty Global is one of the largest cable companies in the world, with its principal operations in Europe. It currently has investments in about seven markets in the Latin America and Caribbean region.