On March 26, 2015, the Telecommunications Authority of Trinidad and Tobago issued the following media release regarding the proposed buyout of Columbus Networks by CWC.
Application for change of control of Columbus Networks International (Trinidad) Limited and Columbus Communications Trinidad Limited through the acquisition of Columbus International Inc. (“Columbus Inc.”) by Cable & Wireless Communications plc (“CWC”)
The Authority makes this Release further to its previous Release dated 12th March 2015 and consequent upon the receipt of an application received from Columbus Communications Trinidad Limited (CCTL) trading as “Flow” and Columbus Networks International (Trinidad) Limited (CNITL) on November 26th and 27th, 2014 for approval of a change of control resulting from a proposed acquisition of its parent company Columbus International Inc. by Cable and Wireless plc (CWC).
The Authority is empowered to approve a transfer of control of its concessionaires by Section 22 (1) of the Telecommunications Act and by Condition A17 of the concession issued to all concessionaires, bearing in mind that such approval should not be unreasonably withheld. The Authority by Condition A20 is empowered to, in the grant of any such approval, impose such reasonable conditions upon the concessionaire in respect of any transfer, assignment, change, disposal or arrangement as it considers appropriate.
The Authority informs that since receipt of the application from its concessionaires on 26th and 27th November 2014, the Authority has spared no effort in ensuring a timely, complete and thorough analysis, conducted in a fair and transparent manner. The Authority believes that its decision making process in this application, which now culminates in this release, has satisfactorily and sufficiently taken into reasonable consideration the interests of the sector, the Applicants, the Acquiring Party and the consumer.
The Authority now informs that on 25th March 2015, at its 116th Meeting, the Board of the Authority resolved as follows:
Directors: Mr. Selby Wilson (Chairman), Mr. Nazir Alladin (Deputy Chairman), Mr. Asif Ali, Dr. Satnarine Balkaransingh, Ms. Hazel Brown, Mr. Terrence Henry, Mr. David Lamy, Dr. Kim Mallalieu, Mr. Farouk Gerard Mohammed, Dr. Ronald Ramkissoon, Mr. Simbhoonath Sawh.
“BE IT RESOLVED THAT:
- The Authority retains its view from its decision at its 114th Meeting and its 115th Meeting that given CWC’s possible ability to exert its influence via a 49% minority shareholding on the part of CWWI in TSTT, to affect TSTT’s strategic decision making through an existing Shareholders’ Agreement and the prevailing level of market concentration in the domestic telecommunications sector, the proposed acquisition may be expected to result in adverse effects on competition in the markets for fixed voice, broadband, pay TV and related wholesale services in Trinidad and Tobago and as such the proposed acquisition is likely to lead to a significant impairment of competition in the domestic communications market in Trinidad and Tobago;
- The Authority retains its view from its decision at its 114th Meeting and its 115th Meeting that it is necessary and contingent upon the Authority that in any consideration or reconsideration of its decision that appropriate undertakings be taken to ensure the remedying, mitigating or preventing of any substantial lessening of competition or adverse effect which may be expected to result from the proposed acquisition;
- The Authority retains its view from its decision at its 114th Meeting and 115th Meeting that any decision regarding a change of control granted by the Authority must ensure that the possibility of any substantial lessening of competition or adverse effect which may be expected to result from the proposed acquisition has been sufficiently mitigated so as to allow the issuance of approval by the Authority; and
- The Authority now holds as follows:
(i) Having regard to the sufficiency of the information submitted by the Applicants and CWC in response to the Authority’s Resolution at its 115th Meeting, the Authority is of the view that there can be satisfactory mitigation of any anti-competitive or adverse effects which may reasonably be expected to result from the proposed acquisition and as such shall not unreasonably withhold its approval to be granted pursuant to section 22(1)(c) of the Act;
(ii) Pursuant to concession condition A20, the Authority hereby grants its approval of the application for change of control and shall impose the following conditions in the grant of its approval by this Resolution:
(a) The Applicants and CWC shall ensure that:
The proposed spend for CNITL, being focused on maintenance works only, be maintained and not be reduced for the five year period commencing 2015.
The proposed spend for CCTL, excluding CCTL’s assumed spend for a mobile licence, must include significant strengthening of the roll out of the services of CCTL to Tobago. Notwithstanding the requirement to liaise with TTEC for roll out in Tobago, CCTL shall ensure that it meets its roll out obligations;
(b) CWC shall adhere to the terms of the letter Agreement dated 18th March 2015 between NEL and CWC/CWWI, in good faith.
(c) CWC/CWWI shall ensure the complete divestment of the 49% shareholding in TSTT within the timeframe stipulated by the Authority, namely within one (1) year of the date of communication of this reconsidered decision, or such extended date as may be approved by the Authority in writing, such extension to not exceed a maximum of six (6) months.
(iii) The Authority shall take such steps as are available to it under law in the event of any breach of these conditions by the Applicants or CWC, their agents or representatives.
(iv) This Approval shall take effect from the date of successful closing of the proposed acquisition.
(v) The Applicants and CWC shall keep the Authority informed of the progress of the proposed acquisition. Notwithstanding this Resolution, the Authority reserves the right to review its decision should the closure of the proposed acquisition not be completed within one (1) year of the date of this Resolution.”
The Authority wishes to thank the parties involved in the proposed change of control for their submissions and cooperation in this matter.