BOTH Cable and Wireless Communications (Ltd) and Columbus may be in breach of their licences if they engage in activities which can have an effect of unfairly preventing, restricting or distorting competition.
So said the Eastern Caribbean Telecommunications Authority (ECTEL), in a statement this week on the proposed purchase of Columbus by CWC; announced earlier this month .
Noting that it had reviewed the preliminary information available on the planned purchase, the sub regional body explained that under the current regulatory regime telecommunications licence holders including the aforementioned two may be in breach of their licences.
“The recent announcement to combine businesses 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,” ECTEL statement read in part.
ECTEL added that this development can potentially result in a negative impact on competition. Further it can reduce choice by consumers of both services and service providers.
“Since the advent of liberalization, the prices of all telecommunications and ICT services have been significantly reduced due to competition in the region. ECTEL is mindful that over the past 15 years there has been major development in the telecommunications sector under the guidance of independent regulators in the Eastern Caribbean. Increased monopolization therefore can erode the gains made by the liberalization, and create challenges for the entrance of new service providers,” ECTEL noted in its statement.
ECTEL said that it, along with the National Telecommunications Regulatory Commissions in member states will intensify collaboration with other regulators in the Caribbean region to seek further information in order to advise member governments on the issue.
The sub-regional body claimed that it urged the OECS Commission to move with some haste to establish the OECS Competition Commission.
Meanwhile Digicel Wednesday called on all regulatory bodies throughout the Caribbean “to see through the smokescreen put up by Cable & Wireless/Columbus and subject the proposed transaction to the fullest regulatory scrutiny.”
The company was responding to CWC’s recent comments in the media about the money it was spending on the acquisition and its assertion that Digicel was suffering from “sour grapes”.
“Digicel can confirm that it looked at Columbus Communications several months ago and that it was Digicel’s assessment that the value of Columbus Communications was no more than US$2 billion. The assertion by the UK-listed Cable & Wireless that Digicel is suffering from “sour grapes” couldn’t be further from the truth as the reality is Digicel was not prepared to over-pay for the business – unlike Cable & Wireless,” Digicel said in a statement.
The company further stated that “with the proposed combined entity having a near stranglehold on the fixed line, broadband and cable TV markets across the region, Digicel is cautioning that this monopolistic position will translate to higher prices for consumers, a slower pace of investment and innovation, job losses and ultimately reduced economic stimulation for the Caribbean – not least because consumers will be looked on to pay up for the massive premium that was paid for the business.”