Shareholders of Cable & Wireless Communications plc, the parent company of LIME, voted in favor of a merger with Columbus International Inc., operator of Flow in Jamaica, at a general meeting in London last week.
Following the announcement of the transaction on Nov. 6, nearly nine out of 10 shareholders in approved the deal.
Cable and Wireless said the combined business of CWC and Columbus would deliver more and better services, cost savings and operational efficiencies to private and public sectors customers.
However, competitors and regulators are concerned that the transaction could lead to less competition.
In November, the Eastern Caribbean Telecommunications Authority (ECTEL) said, based on a review of information available at the time, it noted “with concern” that the transaction could potentially reduce choice for consumers and create barriers of entry for competitors.
The ECTEL Council of Ministers with responsibility for telecommunications met in Saint Lucia on Dec. 4 to discuss the impact of the proposed merger.
The recent trend of consolidation of the telecommunications sector in the Caribbean region, particularly in mobile services, undersea fibre cable and subscriber cable television services, could ultimately result in monopolies or near monopolies in the provision of fixed network services, a joint council statement said.
The council concluded that the Eastern Caribbean regulator would undertake an impact analysis of the proposed mergers in conjunction with the Telecommunications Authority of Trinidad and Tobago and ensure that any new licenses issued would provide for fair competition.
Phil Bentley, CWC’s chief executive officer, said, “We know we have to work closely with governments and regulators to ensure that our customers benefit and that competition is not compromised – and that’s a commitment we’ve happily made to all our stakeholders; a commitment we intend to uphold.
He said that in previous discussions with governments and regulators CWC had emphasized that the transaction would bring further investments to the operating markets.
“The merger is good for our employees, the communities we serve and, most importantly, our current and future customers,” he said.
Meanwhile, LIME competitor Digicel, put into question future investments in the region if the merger goes ahead.
Digicel Group CEO Colm Delves said the firm would re-evaluate its investment strategy if regulators approve the deal.
“We are prepared to invest in the region, but that has to be in the knowledge that there is going to be a level playing field. I think it is important that we understand what the acquisition means because we have to make choices as to where we invest our dollars,” Mr. Delves told Jamaica’s Sunday Gleaner.
“Whatever way you measure it, I think the end result of the acquisition, assuming it goes ahead, will mean that there will be virtual monopolies in fixed telephone, cable TV, on-island fiber, fixed Internet broadband, and also, which is a big issue, on the off-island submarine capacity to the United States,” he added.