Government’s approval of Digicel-Transact acquisition shocks rival telcos

30 Sep 2011

A number of Bermudan telecoms operators have expressed ‘shock and concern’ over the government’s decision to okay Digicel’s acquisition of domestic internet service provider (ISP) Transact, The Royal Gazette reports. It is understood that officials of TeleBermuda International (TBI), KeyTech and North Rock Communications have questioned the decision which they claim is at odds with the principles of the government’s lofty telecoms reform plan. Specifically, the telcos have expressed concern that allowing Digicel to acquire the ISP will effectively give it an unfair head start in terms of positioning itself ahead of the rivals before the expected liberalisation of the industry is proposed by government. The chief executive of KeyTech, Sheila Lines, said the decision would allow Digicel to ‘shortcut’ any government-led reforms requirements relating to holding a dominant position in the market, while TBI president Greg Swan said he was ‘shocked’ by the state’s approval of the deal – as the same regulators had previously denied a request by his firm to made an acquisition.

In response to questions, the Department of Telecommunications, a department within the environment, planning and infrastructure ministry, has told the paper that the government’s position had not changed. ‘The government has not moved away from its previously stated reform plans,’ the statement read, and continued: ‘Its position remains that until reform has been implemented, licence classes will remain separate, and companies holding more than one licence class must operate those licences within separate entities … The government continues to prepare the legislative package that will introduce telecommunications regulatory reform and fully anticipates that legislation will be tabled in November.’

Bermuda, Digicel Bermuda (incl. Bermuda Telephone Company), FKB Transact