Home' Trinidad and Tobago Guardian : December 11th 2014 Contents BG4 NEWS
BUSINESS GUARDIAN www.guardian.co.tt DECEMBER 2014 • WEEK TWO
Irish-owned, regional telecommunications giant Digicel
says the completion of its rollout of fibre throughout
the region, and particularly in Jamaica, could be
impacted if the proposed merger between Cable &
Wireless Communications and Columbus International
is allowed to go ahead without significant intervention
from regional regulators.
Digicel says that it would "need to review our investments
across the Caribbean," especially in the areas of fixed broadband
and cable television "if competition is removed from the
market, as will surely be the case with the proposed merg-
er."Digicel sought to clarify what it described as "inaccurate
and misleading information" quoted in the last Sunday BG
lead story, which was headlined Cable & Wireless Commu-
nications' CEO, Phil Bentley: ECTEL will not hold back deal.
In relation specifically to Jamaica, but also applicable to the
rest of the Caribbean, Digicel said:
"There are significant costs associated with the installation
of fibre. These costs are not recoverable if a virtual monopoly
is allowed to squeeze out an entrant to the market. Therefore,
the long payback term for the installation of a fibre network
is only feasible if the market is competitive."
The Business Guardian sought comments on the Digicel
clarifications from CWC's head of government relations and
regulatory, Chris Dehring.
The proposed CWC and Columbus merger is not about the
mobile market. It is well known that Digicel is the leader in
the mobile market in Jamaica with over 70 per cent market
share, but our dominance starts and ends here. The fundamental
issue is the creation of monopolies, or virtual monopolies, in
the Cable TV, Fixed Telephony, Fixed Broadband and Off-
Island Capacity (submarine cable) markets.
Digicel are much larger than us with almost 14 million sub-
scribers worldwide compared to our 4.5 million. They have
bought 20 companies in the last 10 years in the Caribbean
and admitted publicly that they also tried to acquire Columbus
but found the price too high. If they had been successful with
that acquisition, then there really would be a danger of a
"monopoly" which isn't the case today.
Both our competitors and our regulators know and understand
that in today's world of converged technologies, it is indeed
very much about the power of wireless. The sheer size and
value of the mobile market in the Caribbean and Digicel's
confessed dominance of it, makes them by far the dominant
telecoms player in the region. That is a fact they have proudly
paraded for years in their "bigger, better" tagline.
In fact, to even speak about a monopoly in fixed telephony
is simply archaic since the vast majority of telephone calls
now take place over mobile networks. Fixed line subscribers
are a declining market in the Caribbean and globally.
The proof of the dominance of wireless is that even our
(Columbus/LIME) combined fixed voice, broadband and tel-
evision revenues in Jamaica (approx. US$150 million) pales in
comparison to Digicel's US$430 million in revenues from
mobile alone! Saying we have a monopoly on our old copper
fixed line is like saying we have a monopoly on the slide rule
- which not a lot of people seem to want these days either.
The small number of cable tv subscribers they say they
acquired when they bought Telstar in Jamaica is surprising in
light of the tremendous publicity which heralded that deal.
But more importantly, the statistics they quote actually
support our position. In a Jamaican market of 2.7 million
persons they have 2.2 million mobile subscribers (81.5 per
cent) generating over US$430 million in annual revenues.
Yet they infer that in that same market of 850,000 house-
holds, Columbus and ourselves could have a "monopoly" with
our combined 130,000 cable TV and broadband customers
(15.3 per cent) and 230,000 and declining, fixed line customers
(27 per cent).
Combined, that generates only US$150 million in annual
revenues with significantly higher operating costs. And besides,
even if they decided to go after only half of the underserved
households available to them, that still leaves a very significant
market to go after.
In fact, they have heavily publicized how successful and
competitive their wireless broadband product (WIMAX) has
been and confirmed they have over 46,000 broadband cus-
They also announced to much fanfare their islandwide roll
out of fibre and cable TV in Jamaica promising a superior
cable TV product. That, combined with the massive revenues
from their mobile operations and the marketing power that
The actual statistics, which are stated below, clearly show
the markets in which CWC and Columbus will create monop-
olies, or virtual ones, as Digicel Jamaica does not currently
have operations in these areas or would become extremely
marginalized by the proposed merger.
Digicel through Telstar has 5,000 Cable TV subscribers
and not the 21,000 quoted in the Article.
Cable TV Providers
Fixed Telephony Provider
Fixed Broadband Provider Subscribers
CWC/Columbus will control 80 per cent of all the
Submarine Cable Systems entering/leaving Jamaica.
CWC/Columbus will control 100 per cent of all Submarine
Cables between Jamaica and the USA.
Cayman Jamaica Fiber System CWC/LIME
(Alba 1, which is owned by a Cuba-Venezuela partnership,
does not provide a viable alternative for access to the USA.
Therefore, it does not alleviate the monopoly which the pro-
posed merger could create. Furthermore, the landing station
for Alba 1 is hosted by CWC/LIME)
We could stop fibre
investment in Caribbean
Chris Dehring, CWC's head of government relations and
Continued on Page 5
Denis O'Brien, Excutive Chairmain of Digicel
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