An­tho­ny Wil­son

Dig­i­cel ex­ec­u­tive chair­man De­nis O'Brien said yes­ter­day that to pre­serve com­pe­ti­tion and pro­tect con­sumers in the Caribbean, re­gion­al reg­u­la­tors should in­sist that the com­bi­na­tion of Ca­ble & Wire­less Com­mu­ni­ca­tions (CWC) and Colum­bus In­ter­na­tion­al be re­quired to sell as­sets.

Speak­ing to re­gion­al reg­u­la­tors and tele­com com­pa­ny of­fi­cials at the start of the two-day Caribbean Telecom­mu­ni­ca­tions Union (CTU) fo­rum at the Cas­ca­dia Ho­tel, St Ann's, yes­ter­day, O'Brien re­it­er­at­ed Dig­i­cel's ar­gu­ment that the pro­posed ac­qui­si­tion of Colum­bus by CWC would lead to a "very sub­stan­tial re­duc­tion" in six re­gion­al coun­tries, in­clud­ing T&T, and in four prod­uct cat­e­gories, in­clud­ing fixed broad­band, ca­ble tele­vi­sion and fixed line ser­vices.

As re­port­ed ex­clu­sive­ly in yes­ter­day's T&T Guardian, O'Brien spoke at the CTU fo­rum and held dis­cus­sions with Fi­nance Min­is­ter Lar­ry Howai at the Min­istry of Fi­nance build­ing, Port-of-Spain.Ask­ing what should reg­u­la­tors do to pro­tect com­pe­ti­tion, O'Brien said: "The an­swer is the big D: Di­vesti­ture. CWC and Colum­bus will have du­pli­cate fixed line, ca­ble TV and sub­ma­rine fi­bre in­fra­struc­ture in your mar­kets if this deal is ap­proved.

"If this merg­er is to be ap­proved, reg­u­la­tors in the re­gion will have to in­sist on the con­di­tions prece­dent that these du­pli­cate as­sets are sold. This is what will pre­serve com­pe­ti­tion."The Dig­i­cel chair­man said he was not ar­gu­ing that those as­sets need­ed to be sold to Dig­i­cel, on­ly that they did need to be sold to some third par­ty so that com­pe­ti­tion could pre­vail. O'Brien said the spin­ning off of as­sets to pre­serve com­pe­ti­tion was "the on­ly an­swer and the on­ly ef­fec­tive so­lu­tion."

Work for reg­u­la­tors

He said that as was the case with all merg­er ap­provals frame­works, it was for the reg­u­la­tors to high­light where con­cerns ex­ist­ed and "it is for the par­ties ap­ply­ing for the per­mis­sion to merg­er that must put for­ward so­lu­tions to ad­dress these prob­lems."O'Brien said while the risks to com­pe­ti­tion were huge, Dig­i­cel was not say­ing that the merg­er could not hap­pen or that it nec­es­sar­i­ly meant Ar­maged­don for the Caribbean tele­coms in­dus­try.

"It is on­ly with a com­pre­hen­sive and thor­ough eco­nom­ics dri­ven merg­er im­pact analy­sis and the im­po­si­tion of prop­er ap­proval con­di­tions and safe­guards that we can pre­vent our in­dus­try slid­ing back to the dark days of a mo­nop­oly ser­vices," the Irish­man in­sist­ed.

In a pre­sen­ta­tion in which he ac­cused CWC/Colum­bus of at­tempt­ing to "dic­tate ridicu­lous time­lines to re­gion­al reg­u­la­tors," O'Brien not­ed it took eight months for reg­u­la­tors to ap­prove the Dig­i­cel deal with Claro in 2011 and ten months to get ap­proval of its ac­qui­si­tion of a sub­ma­rine ca­ble com­pa­ny in 2013.

Merg­er reper­cus­sions

He pre­sent­ed sev­er­al "facts" to the meet­ing:

�2 The pro­posed merg­er will lead to a very sub­stan­tial less­en­ing of com­pe­ti­tion in at least six ge­o­graph­ic mar­kets – Ja­maica, Trinidad and To­ba­go, Bar­ba­dos, St Lu­cia, St. Vin­cent and the Grenadines and Grena­da.He said those were the mar­kets where the key im­pact of this pro­posed deal would most keen­ly be felt by con­sumers.

�2 In the six mar­kets, the pro­posed merg­er will lead to the cre­ation of a com­plete mo­nop­oly or a near mo­nop­oly in the fol­low­ing re­tail or con­sumer prod­uct mar­kets:

* Broad­band In­ter­net Ac­cess (both com­mer­cial and res­i­den­tial).

* Fixed line ser­vices.

* Ca­ble tele­vi­sion ser­vices.

* Fa­cil­i­ties-based ICT ser­vices;

�2 Mo­nop­o­lies al­most al­ways lead to high­er prices, poor ser­vices, low­er lev­els in­no­va­tion and a re­duc­tion in in­vest­ment. "We will be right back to the 1980s or 1990s," he said.

�2 The pro­posed deal will lead to an al­most com­plete stran­gle­hold on sub­ma­rine fi­bre/ in­ter­na­tion­al con­nec­tiv­i­ty right across the Caribbean re­gion.