LIME and Flow merger gets green light in Jamaica

19 Jan 2015

Jamaica’s Minister of Science, Technology, Energy & Mining, Phillip Paulwell, has approved the proposed merger between the Jamaican subsidiaries of Cable & Wireless Communications (CWC) and Columbus Communications, which comes as part of a wider USD3 billion regional tie-up which was first announced in November 2014. CWC is active in Jamaica’s fixed and mobile markets via its LIME unit, while Columbus offers cable TV, broadband and telephony services as Flow Jamaica. A statement from the ministry has outlined a number of restrictions on the deal, including: existing interconnect termination rates to remain in effect until a new fixed termination rate is established; CWC must comply with any limitations of the licences being transferred from Flow; customers should have the option to keep their existing package or transfer to a more favourable one; customers opting to terminate their contracts should be allowed to do so without penalties; CWC should provide access to international bandwidth on a non-discriminatory basis; LIME and Flow should be ready to enable the implementation of number portability by 31 May 2015; and CWC should ensure that other licensees are provided with non-discriminatory access to infrastructure such as ducts, poles and landing stations which could act as a competitive bottleneck.

Rival operator Digicel, which competes with LIME and Flow in Jamaica and a number of other Caribbean markets, has called for the merger to be blocked on competition grounds, though Paulwell did highlight the fact that advice had been received from the Attorney General in relation to a previous merger between Digicel and Claro, saying that ‘the Telecommunications Act did not expressly authorise him to impose conditions in relation to the transaction’.

Separately, LIME has revealed that it lost JMD60 million (USD515,000) in 2014 due to cable theft, with losses over the past decade now totalling JMD400 million. The telco has petitioned the Ministry of Industry, Investment and Commerce to call for stronger punishments for those found guilty of stealing telecoms equipment. The Ministry has said it supports LIME’s stance, while adding that it is satisfied with its controls on the export of scrap metals to ensure that stolen materials cannot be traded.