Home' Trinidad and Tobago Guardian : February 1st 2015 Contents FEBRUARY 1 • 2015 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG6
The telecoms market in T&T is preparing
itself for a shake-up following the news
of a major acquisition in December at the
same time as competition is set to intensify
via the launch of a new mobile phone
licence. Major operators are squaring off
to increase their market share after the
government invited bids for a third mobile
phone operating licence last year, the completion of which
would overturn the current duopoly in mobile telephony.
The largest player TSTT (Telecommunications Services of
T&T) is controlled by the Government and Cable & Wireless
Communications (CWC), while its competitor, Digicel, is a
regional player whose chairman is Ireland s Denis O Brien.
In another major development, London-based CWC
announced a US$3 billion takeover of regional cable TV and
Internet operator, Columbus International in December, herald-
ing consolidation in a country where standards of living, and
hence mobile penetration, are already high.
T&T s mobile phone penetration rate of 146 per cent---indi-
cating more than one mobile phone per customer---is the
fourth highest in the Caribbean with TSTT and Digicel having
around 1.9 million subscribers between them.
With many Trinidadians now owning two mobile phones,
revenue growth from voice-only is levelling off. The latest
available data shows telecoms and broadcasting revenues were
TT$5.5 billion (US$900m) in 2013, nearly half from mobile
However, operators see potential to boost data and value
added services across all platforms, with new alliances and
the development of services such as e- and m-banking expected
Competition for third licence
With the government first expressing an interest in providing
a third mobile provider in 2011, the process of establishing
another player in the market is firmly underway.
According to local media, six companies have reportedly
expressed interest in the third operating licence, including the
two incumbents, Canadian-owned Columbus, Suriname s
Telesur, local operator Star Mobile Caribbean, and CWC itself
(in its own right, not as a minority partner in TSTT).
The telecoms authority is reviewing the applications, with
3G and 4G spectrums in the 700MHz, 800MHz, and 1900MHz
bands on offer.
However, a successful CWC bid could put the company in
the awkward position of competing against its 49 per cent
owned TSTT. To avoid this, a realignment of ownership was
thought to be on the cards, but this is not likely to occur until
after Trinidad s May elections according to CWC s CEO Phil
Meanwhile, CWC s acquisition of Columbus, which is subject
to regulatory approval, will effectively reduce the number of
bidders for the third operating licence.
Takeover under scrutiny
Colombus, which is a multi-platform operator active across
the Caribbean, is a hotly contested prize given its regional
footprint and broadband triple play offering in Trinidad under
the Flow brand. "This is a transaction that transforms CWC,
providing a step change in growth and returns," said Bent-
ley.Analysts agree that CWC will benefit from a partner dominant
in TV and data transport.
"This natural synergy will allow CWC to transform itself
from a telecoms company into a true communications & enter-
tainment company," Khafra Kambon, a telecoms consultant
for TSTT, told the Oxford Business Group.
"Of the Caribbean markets the largest by revenue and the
market with the greatest potential for profitability, is T&T,"
However, the takeover is under scrutiny. It is contested by
several parties including the labour union and will need reg-
ulatory approval in various countries. Digicel has been par-
ticularly vocal in criticising its potential effect on competition.
"The answer is the big D: divestiture," said Digicel chairman
Denis O Brien, attending a meeting of the Caribbean Telecom-
munications Union (CTU) in Trinidad in January.
"CWC and Columbus will have duplicate fixed line, cable
TV and submarine fibre infrastructure in the markets if this
deal is approved."
Separately, O Brien said Digicel had also considered a bid
for Columbus, but it had valued the company at no more than
The Eastern Caribbean Telecommunications Regulatory
Authority (ECTEL) said it had reviewed the preliminary infor-
mation available regarding the deal and as a result has "deep
concern that this development can potentially result in [a]
negative impact on competition."
Telecommunication ministers from the Organisation of East-
ern Caribbean States (OECS) said in December that the merger
would result in the formation of a monopoly in the sub-region.
Oxford Business Group (OBG) is a global publishing,
research and consultancy firm, which publishes economic
intelligence on the markets of Latin America, Asia, Middle
East and Africa. Through its range of print and online prod-
ucts, OBG offers comprehensive and accurate analysis of
macroeconomic and sectoral developments, including banking,
capital markets, insurance, energy, transport, industry and
telecoms. The Report: Trinidad and Tobago 2015 will be
produced in partnership with InvesTT.
T&T gets set for telecoms race
OXFORD BUSINESS GROUP
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