Digicel ‘concern’ at C&W transaction

Cable & Wireless Communications’ proposed $1.85 billion acquisition of Columbus International, a fibre player with assets in the Caribbean and Central America, hasn’t gone unnoticed at the headquarters of Digicel, the telecoms group controlled by Denis O’Brien.

The deal was announced on Thursday and Digicel responded by saying it was “naturally concerned” about the “clear and obvious challenges and potential issues” posed by the transaction from a regulatory and competition perspective.

“This proposed transaction raises a considerable number of issues for telecommunications regulation and competition generally in the region,” Digicel said.

“The issues that will need to be addressed include such matters as fairness in spectrum allocations, local loop unbundling, price bundling generally as well as a myriad of other likely issues,” it added, “which will only become apparent once Digicel and other agencies and bodies have been fully appraised of the details of the proposed transaction and the likely resultant impact on the telecoms market in the region.”

Miami-based C&W was once the undisputed top dog in telecoms in the Caribbean but that all changed when Digicel launched 13 years ago, with O’Brien’s operation now considered to be the number one player in the region.

C&W’s takeover of Columbus has one other intriguing element. A consequence of the deal will be that John Malone, the power behind Liberty Global, parent company of cable TV and telecoms group UPC Ireland, would own 13 per cent of C&W.

Buying up assets

This will pitch the wealthy Irish-American, reportedly the biggest land-owner in the United States, against O’Brien’s Digicel, which itself is busily buying up fibre assets to expand its operations.

The media-shy Malone has been busy buying up assets in Ireland in the past couple of years, including Humewood Castle in Co Wicklow, and three hotels in Dublin – the Westin, the Trinity City on Pearse Street, and the Hilton on Charlemont Place.

The combination with C&W will boost his interests in the Caribbean and Central America and turn up the heat on Digicel. All of which is potentially good news for consumers in the sun-kissed region.