Digicel believes that in the transaction to purchase Columbus International, Cable & Wireless has overpaid by US$1 billion and calls on regulators to see through Cable & Wireless/Columbus smokescreen and subject proposed transaction to fullest regulatory scrutiny

Digicel today called on all regulatory bodies throughout the Caribbean to see through the smokescreen put up by Cable & Wireless/Columbus and subject the proposed transaction to the fullest regulatory scrutiny.

Responding to Cable & Wireless’s recent comments in the media, Digicel confirmed that it looked at Columbus Communications several months ago and that it was Digicel’s assessment that the value of Columbus Communications was no more than US$2 billion. The assertion by UK-listed Cable & Wireless that Digicel is suffering from “sour grapes” couldn’t be further from the truth as the reality is Digicel was not prepared to overpay for the business – unlike Cable & Wireless.

With the proposed combined entity having a near stranglehold on the fixed line, broadband and cable TV markets across the region, Digicel is cautioning that this monopolistic position will translate to higher prices for consumers, a slower pace of investment and innovation, job losses and ultimately reduced economic stimulation for the Caribbean – not least because consumers will be looked on to pay up for the massive premium that was paid for the business.

Digicel Group CEO Colm Delves said, “Any discussion of whether or not Digicel was interested in buying Columbus is a smokescreen put up by Cable & Wireless as it tries to railroad through a very expensive transaction that will put enormous pressure on its balance sheet. While Digicel did take a look at Columbus, the simple fact is that Cable & Wireless paid some US$1 billion more for Columbus Communications than in our view it is actually worth – a fact that should be of grave concern to its shareholders and the public alike.

“There is a real probability that customers will ultimately have to pay the price for the exorbitant price that was agreed. Cable & Wireless has said that it can’t ‘talk about pricing and plans until the deals are done’ and that statement alone should set alarm bells ringing.”

He continues, “It’s vital that the good of consumers is top of mind with regulators and governments. Digicel has been at the forefront of competition in the communications industry and that competition is key to a vibrant market and to economic development -- we cannot risk jeopardising all that has been achieved to date. The proposed transaction must be examined properly and in the fullness of time by all of the relevant agencies to ensure that consumers’ interests are protected and promoted.”