The region's largest mobile provider is calling on regulators throughout the Caribbean to ensure that there is "full disclosure and transparency" in the approval process of the proposed acquisition of Columbus International by Cable & Wireless Communications for US$3.02 billion.
Responding to questions submitted on Friday, Digicel said: "The first imperative for the industry is full disclosure and transparency around the proposed transaction. We simply must have this.
The detail of what is being proposed in this announced transaction needs to be shared openly with the industry in Trinidad so that it is clear what the intentions of the merging parties are and so that all stakeholders (including Digicel) have a right to engage fully in the approval process and provide their views as to what all of this means."
Digicel said that the deal cannot be approved behind closed doors, arguing: "International best practice and indeed common sense dictates that a comprehensive process is carried out to determine the potential effects of this transaction on the industry in Trinidad & Tobago.
"There needs to be a transparent public process whereby all stakeholders have their say. This is the first imperative. Without this, the telecoms industry in Trinidad & Tobago would be exposed to huge risks."
Specifically with regard to the competitive environment in T&T, Digicel said: "As CWC (with its 49 per cent stake in TSTT) and Flow are each other's main competitors for fixed telephony and fixed broadband in T&T, the merged company would hold a near monopoly position for these services. The combined entity may also enjoy significant infrastructural advantages that could be difficult for competitors to replicate in the short term and this could enable it to raise prices."
The Irish-owned company did not specify what it meant by "significant infrastructural advantages."It said that there was much more involved in ensuring vibrant competition than the number of players in the market."The telecoms industry is heavily regulated the world over to protect against the creation of unlevel playing fields whereby key advantages are unfairly gifted to one or more operators to the detriment of others. This is really where the danger in this proposed transaction lies," according to Digicel.
And it warned that unless there was "vigorous scrutiny through a full transparent public process, the enlarged entity will emerge with certain unassailable advantages created by the distortive effect on competition that this transaction will undoubtedly have. "Other regulatory initiatives may also need to be reconsidered in light of the changes to the telecommunications industry now being brought about."
The Kingston-based telecommunications provider said key issues such as spectrum allocations, monopolies in essential facilities, predatory pricing need to be protected against."It is far better and far more effective that action is taken now to ensure that the best interests of the industry generally and ultimately the consumer are fully addressed in the context of this approval process than by legislative efforts down the road," Digicel said.
