Home' Trinidad and Tobago Guardian : May 16th 2013 Contents Summary: On May 13, 2013,
Columbus Networks and CWC
announced the formation of a
joint venture to provide
expanded wholesale band-
width capacity for the Caribbean and Americas
The development promises greater route
choice, improved reliability and higher per-
formance for customers. At the same time, it
raises questions about who will safeguard
against the possibility of anti-competitive
pricing and practices.
When Columbus Networks and Cable and
Wireless Communications, announced the
formation of their new joint venture entity at
International Telecoms Week 2013, it signalled
an important milestone for the telecommu-
nications sector in the Caribbean.
The development comes at a time when
the region's appetite for broadband is at an
all-time high. The market for wholesale broad-
band capacity is experiencing solid growth
and shows no sign of slowing anytime soon.
It is no surprise then, that we are seeing con-
solidation in the market as service providers
position themselves to take full advantage of
the expected growth in demand.
The two companies were already the most
significant providers of wholesale bandwidth
for the region. Barbados-based Columbus
Networks, which operates in 27 markets in
the greater Caribbean, Central American and
Andean region, estimates that it currently
manages 70 per cent of the region's traffic.
CWC Wholesale Solutions is a subsidiary
of United Kingdom-based Cable and Wireless
Communications, which manages a diverse
set of telecommunications businesses in Central
America and the Caribbean including the well-
known LIME brand. Their joint venture will
be called CNL-CWC Networks, and it will be
managed by Columbus, whose share will be
72.5 per cent to CWC Wholesale Solutions'
27.5 per cent.
Columbus and CWC, in a joint statement,
said they expect that after completing necessary
network interconnections, the joint venture
will offer wholesale customers an expanded
network platform that spans more than 42,000
kilometres and reaches more than 42 countries
in the region.
According to the statement, "The new joint
venture company will serve as the sales agent
of both Columbus Networks and CWC Whole-
sale Solutions for international wholesale
capacity." It added, "Columbus Networks and
CWC Wholesale Solutions will retain own-
ership and control of their respective existing
networks in the region."
In addition to the joint venture, CWC
Wholesale Solutions has entered into a separate
services agreement with Columbus Networks,
under which Columbus Networks will provide
CWC Wholesale Solutions certain operation
and monitoring services.
Paul Scott, president of Columbus Networks,
promised that, "Wholesale customers will be
able to take advantage of expanded network
reach and service benefits by doing business
with a company that can provide more band-
width and broader reach, faster and better."
Simeon Irvine, chief executive of CWC
Wholesale Solutions, spoke about the venture
similarly, saying, "By creating this joint venture,
CWC Wholesale Solutions can expand its net-
work reach and increase the diversity and
security of supply for our customers and those
Officials from both companies shared that
the companies hope to offer customers greater
IP traffic routing options, improved reliability
and higher performance as the joint venture
For all their expected enthusiasm about the
joint venture, the success of an enlarged
Columbus/CWC is by no means guaranteed.
The strong parent brands remain and there
is the real possibility of potentially conflicting
strategies from Columbus and CWC for devel-
opment of the Caribbean market. It remains
to be seen how the enlarged entity will position
itself in the market.
For Columbus, the deal enables the supply
of international wholesale capacity and IP
services to markets the company does not
currently reach, such as Grenada, Barbados,
St Lucia, Antigua and St Vincent and the
Grenadines. It also provides them with addi-
tional connectivity options for Dominican
Republic and Jamaica.
For Cable and Wireless, its current LIME
territories will be able to benefit from enhanced
bandwidth capacity, enabled by access to
Columbus Networks sub-sea capacity.
However, both companies must await fur-
ther regulatory approvals in Panama, Colum-
bia, Cayman Islands, The Bahamas, Anguilla,
Antigua and Barbuda, The British Virgin
Islands, Montserrat and St Kitts and Nevis
before they can begin rolling out services on
behalf of the joint venture in those coun-
The promise of an expanded network that
can offer greater resilience, redundancy and
routing options for Caribbean traffic is certainly
laudable. So, too, is the possibility of significantly
improving the region's access to international
capacity to better meet the increasing demands.
However, the benefits of this joint venture
must be weighed against the possibility that
this new entity can negatively influence pricing,
competition and downstream market growth.
Unhealthy collusion or price-fixing in this sig-
nificant sector of the telecommunications market
could deal a serious blow to already fragile
regional economies. This must not be allowed
But who is to be tasked with the responsibility
of ensuring that things proceed in the interest
of health market growth and economic devel-
The small markets of the Caribbean are
marked by under-resourced national regulators,
more practiced in responding to local telecom
wrangling than to strategically analyzing the
international wheeling and dealing of trans-
So the questions now are, who is going to
act as watchdog to safeguard regional, national
and public interests? And, who is going to
ensure that the promised efficiencies and
capacity increase, redound to the benefit of
Caribbean economies and society?
Bevil Wooding is the chief knowledge office
of Congress WBN (www.congresswbn.org), a
values-based international non-profit. He is also
executive director of BrightPath Foundation,
an education-technology non-profit (www.bright-
pathfoundation.org). Follow on Twitter: @bevil-
wooding or at: facebook.com/bevilwooding or
contact via e-mail at: technologymatters@bright-
BUSINESS GUARDIAN www.guardian.co.tt MAY 2013 • WEEK THREE
Growing Caribbean bandwidth capacity
Joint venture between Columbus, Cable and Wireless raises important questions about oversight of regional telecoms sector
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