CWC to buy major regional telecoms firm

| 11/11/2014 | 1 Comment

(CNS Business): Cable and Wireless Communications (CWC) has entered into a proposed deal with Columbus International which, if approved, will see the telecom leader double in size. CWC is expected to pay $1.9bn for the Barbados-based business, as well as assume about $1.2bn in debt.

The firm said it has reached a conditional agreement to acquire the firm, which is valued at more than US$3 billion, that will enable the combined company to accelerate growth, improve service delivery to customers in the Caribbean, offer customers a wider portfolio of products and services, and strengthen its position against competitors. However, CWC’s major regional competitor has already raised concerns about the deal.

Although the acquisition will be subject to various regulatory approvals from governments, regulatory bodies and anti-trust agencies, the magnitude of the merger has Digicel appealing for transparency.

CWC said in a release that the increased scale and capabilities of the combined company would provide the technical platform and financial capacity to help it drive greater innovation and expand its geographic footprint.

Phil Bentley, CWC’s Chief Executive Officer, said the transaction would transform CWC.

“Columbus offers complementary TV, Broadband and B2B capabilities in complementary markets. Together, we will create the best-in-class quad-play offering in the region, delivered on a superior mobile, fibre and subsea network. This is a significant opportunity to better serve our customers and improve the ICT infrastructure of the communities in which we operate, whilst accelerating our strategy and delivering materially enhanced returns and synergy benefits,” he said.

Columbus’ chairman and CEO, Brendan Paddick, said the merger would result in a world-class company focused on customers in the Caribbean, Central America and the Andean regions.

“The proposed acquisition makes both companies stronger, faster and smarter in competing with their larger competitors. The proposed transaction reinforces our commitment to transform connectivity in the region, to increase the attractiveness of the region to investors, to support the growth of the communities we serve by making them more globally accessible and to ensure that our customers always have access to the best products and services available.”

CWC said that the combination of the two companies would be consistent with global industry trends with the convergence of fixed and mobile networks and supports CWC’s new strategy and its four primary areas of focus: drive mobile leadership; accelerate fixed-mobile convergence; reinforce TV offer; and grow business to business and business to government sectors.

However, Digicel said the proposed acquisition raised number of issues for telecommunications regulation and competition.

“We are naturally concerned to ensure that this proposed transaction will not result in an un-level playing field in the Caribbean,” said Digicel Group CEO, Colm Delves. “We look forward to engaging constructively and responsibly with all relevant agencies and bodies to the fullest extent necessary to ensure that fair and vibrant competition is maintained in the Caribbean region and that the interests of all Caribbean consumers are fully protected.”

Digicel raised question of fairness in spectrum allocations, local loop unbundling, price bundling generally as well as a myriad of other likely issues which will only become apparent once the details of the proposed transaction are revealed.

The firm said it looked forward to being provided with the details so it can make considered submissions to the regulatory bodies ahead of the deal being finalized. Digicel urged “a transparent and fair process” by the relevant agencies and as a major telecommunications provider in the region, and made it clear it wanted its say in the proposed merger.

CWC Interim Results Announcement November 2014


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Category: ICT, Technology

Comments (1)

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  1. Kerey Mandelson says:

    Ok. What does all this mean regarding jobs for us Caymanians? That what i want to hear!

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