Telecom consolidation continues
Cable & Wireless Communications PLC, the parent company of LIME, announced the acquisition of Columbus International Inc., operators of Flow Jamaica, on Thursday, Nov. 6.
The transaction will reinforce the group’s new strategy, presented in May, Cable and Wireless said.
In addition to a US$1.05 billion capital investment program, this strategy focuses on growth in the mobile, television and business to business segments as well as a faster convergence of mobile, fixed line, high-speed broadband and pay-TV services.
The acquisition of Columbus, a privately owned fiber-based telecommunications and technology services provider in the Caribbean, Central America and the Andean region, will create an enlarged group with a greater regional presence, scale and scope, CWC said. CWC operates in 17 countries in the Caribbean, Latin America and the Seychelles and serves 5.7 million residential customers. Barbados-based Columbus has about 700,000 customers in the region.
“This is a transaction that transforms Cable & Wireless, providing a step-change in growth and returns,” Cable & Wireless Chief Executive Phil Bentley said in a formal statement. “Columbus offers complementary TV, broadband and business-to-business capabilities in complementary markets. Together, we will create the best-in-class quad-play offering in the region, delivered on a superior mobile, fiber and subsea network.”
Customers’ increasing data needs have been driving an industry-wide expansion of fixed line terrestrial submarine networks capable of handling growing data traffic and TV offering.
The deal will provide an opportunity to cross-sell Columbus’s fiber-based services to CWC’s mobile customers and improve CWC’s mobile service through the ability to offload data onto the enlarged group’s fixed networks, leveraging improved resilience and capacity, the company noted.
“Increasingly, our customers tell us that they want to stream/cache/download TV content onto their mobile, tablet or laptop devices; this transaction will combine the retail distribution and sales and marketing skills of CWC, with the IP engineering and content skills of Columbus,” CWC said.
The acquisition will increase the CWC’s pay-TV offering in the region by adding five new markets, including Jamaica, and approximately 380,000 new customers. In addition, Columbus’s TV operations and channel portfolio will speed up the planned market entry in seven new CWC markets.
CWC said it will also assume US$1.17 billion of Columbus debt, pushing the total value of the transaction to US$3.02 billion. CWC will pay $707.5 million in cash, with the rest in shares. It will fund the acquisition via a share placing totaling 10 percent of the group.
In September, LIME competitor Digicel acquired St. Lucia-based International Media Content Ltd., parent company of regional sports broadcaster, SportsMax, and North American broadcaster CEEN-TV, following its July acquisition of Telstar, Jamaica’s second largest subscriber television company.
Rival telecoms company Digicel said it was concerned about the potential regulatory and compliance issues, such as fairness in spectrum allocations, local loop unbundling and price bundling, raised by CWC’s acquisition of Columbus.
“Digicel is naturally concerned to ensure that any proposed transaction will not result in an unlevel playing field being created in the Caribbean markets in favor of the proposed enlarged entity,” Digicel Group CEO Colm Delves said.