Mixed reaction to C&W, FLOW deal

News of Cable & Wireless’ buyout of rival Columbus International made waves in the telecoms sector today, with customers expressing concern about the “monopoly” and one analyst calling on the Barbados Government and others in the region to block the deal until it has “secured guarantees open to public scrutiny and monitoring”.

As customers of both telecommunications companies discussed the potential impact of the takeover, Professor Avinash Persaud warned the deal was a “major threat” to competition in the region.

Professor Avinash Persaud

“The deal will be a major blow to attempts to improve quality and access to telecommunication connectivity, a critical factor in the region’s economic future,” cautioned the senior fellow at the United States-based Peterson Institute for International Economics.

“Despite the region’s need for economic salvation and its importance to the region’s economic future, broadband in the region is more expensive, less broad and less reliable than in markets the region needs to be competitive with. This deal will widen the gap with those competitors, not close it.”

Persaud said if such a deal had been “merely proposed” in the US or Europe, it would attract the attention of the competition authorities “who would have placed a stay on the deal until they were sure it would not compromise quality and price, or until they had received guarantees on both issues from the company”.

Director General of the Barbados Consumer Research Association Malcolm Gibbs-Taitt agreed that there was cause for concern.

“We need competition in all markets, especially in the communications market, because we are well aware that without competition this one-man show that Cable & Wireless has been accustomed to will not serve the consumers of Barbados well at all,” he told Barbados TODAY.

“There is going to be a sour taste in the mouth because, basically, the possibility with this is those who have signed up with FLOW may soon find that they are paying the same amount as those who are already with Cable & Wireless. There is a serious concern on this matter and I really feel that the Minister of Consumer Affairs Donville Inniss needs to explain to society what the Fair Trading Commission has done if the Fair Trading Commission is not minded to explain to Barbadians what has happened here.”

Consumers have also been expressing their views.

Commenting on Barbados TODAY’s Facebook Page, the overwhelming view was that the buyout would create an unwanted monopoly.

“They shouldn’t be allowed to do this! That’s a monopoly,” one person said.

“Very bad news! Killing competition. This deal should not be allowed by the Barbados Government, it’s bad for citizens and the free market,” wrote another.

“Seriously, is that even legal?” Theresa Stuart questioned.

“I thought the Government is not supposed to let things like this happen . . . Where is the FTC in all of this?”

Some were less concerned about the move.

“If you can’t beat them, buy them,” Jason Greenidge wrote.

“This is the best survival business tactic of all times. Buy the main competition.”

“Business as usual. Don’t be so alarmed,” another wrote.

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2 Responses to Mixed reaction to C&W, FLOW deal

  1. Andrew Jordan November 7, 2014 at 6:29 am

    This is definitely a bad situation for services providers who rely on connectivity for a living, we were counting on being able to offer our clients redundancy , now we will be back to a single carrier for island wide service. This means that when their network is down, those who provide internet based services is also down, that is a giant step backward.
    I hope that the regulators (FTC) would ensure that this situation does not happen.

  2. Movement of Concerned Citizens
    Movement of Concerned Citizens November 7, 2014 at 5:45 pm

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