Opportunity beckons for foreign investment in Trinidad & Tobago operator

The government of Trinidad & Tobago is not interested in acquiring the remaining 49% stake it does not hold in local telco TSTT that will be divested by Cable & Wireless Communications (CWC), thus opening up the possibility for a new foreign investor.

Last week, Trinidad & Tobago telecom regulator (TATT) informed CWC it must sell its minority stake in TSTT before gaining approval for its proposed acquisition of Columbus Communications, which controls local cable TV and wireless services provider Flow.

However, National Enterprises (NEL), which holds the government's stake, is not interested in controlling 100% of TSTT, which opens up potential for a new stakeholder or an IPO in which the general public could acquire small stakes, News Day reported a NEL spokesperson as saying.

CWC on Friday acknowledged the terms set out by TATT for its acquisition of Columbus, saying that it "fully recognizes that our shareholding in TSTT would need to be neutralized either by a blind trust or by disposal of our shares."

CWC also said it is extending the longstop date for the completion of the acquisition of Columbus, announced on November 6, to March 31.

CONDITIONS

CWC must give the regulator full written details of financial investment, sources of funds, projects and expansion plans for Columbus for the next five years to ensure the competitiveness of the operator before it can grant approval of the acquisition. The complete divestment must occur within one year, according to TATT.

However, CWC said that it will require 18 months to complete the sale.

In terms of its plans for investments with Columbus in Trinidad & Tobago, CWC said it intends to roll out high speed broadband, build a new data center to host its growing B2B managed services offering, expand its network operations center, and open a technology center.

CONCERNS

In January, Trinidad and Tobago's communication workers union (CWU) expressed its concerns about potential job cuts at Flow resulting from the takeover of Columbus.

CWC CEO Phil Bentley said the joint company was planning on creating 500 new employment opportunities in Latin America.

Jamaica's communications ministry greenlighted the acquisition in January, saying that CWC had agreed to a series of conditions that would protect fair competition.

CWC announced its plans of acquiring Columbus in November for a total US$3.02bn. The transaction was immediately opposed by competing company Digicel, while regional regulators reviewed the potential impact of the merger.

COMPLEMEMENTARY

CWC and Columbus operate largely complementary sub-sea cable networks in the Caribbean and Central America.

The merger builds on a joint venture the companies entered into in May to provide international wholesale capacity to each other and to third party carriers.

The new partnership will also help boost CWC's US$1.05bn Project Marlin investment strategy designed to invest in new networks and services to boost performance and reduce long-term costs.

CWC provides residential fixed and mobile communications in 16 markets in the Caribbean, and to 5.6mn clients in Panama.

Columbus International provides residential cable TV, broadband and landline telephony in Trinidad, Jamaica, Barbados, Grenada, St Vincent & the Grenadines, St Lucia and Curacao under the Flow brand, and in Antigua under the Karib brand.

Both companies also offer corporate ICT services including data center hosting, managed data network and IP services, with Columbus having an extended footprint in the Andean region.