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Brimming with expectation? What Liberty Global could mean to the Caribbean

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Early in the week of 16 May, Liberty Global plc announced that it has completed its acquisition of Cable & Wireless plc (CWC) in a transaction valued at approximately USD 7.4 billion (Source: Liberty Global), which likely is the largest transaction of its kind in the Caribbean/Caribbean Community (CARICOM) region. Accordingly, there is much anticipation – mixed with some trepidation – of what this new era could mean for the region, the individual countries involved, and consumers.

As stated in Early thoughts: proposed takeover of Cable & Wireless by Liberty Global, Liberty Global is an unknown quantity in the region. Although the firm has been in existence since 2005, in the Caribbean it has only had a presence in Puerto Rico. Outside of the region, it is well known for cable television, a segment that tends not to have the stringent oversight experienced by traditional regulated Caribbean telecoms services, such as fixed-line voice and mobile/cellular communications, which are critical markets in the CWC acquisitions.

A breath of fresh air…?

CWC’s history in the Caribbean has been long – over 150 years – and over the past 20 to 25 years, increasingly tense, and at times acrimonious. Although the firm stepped up its game to compete with Digicel in the mobile/cellular communications market, the fixed-line telephony, and to a lesser degree the Internet service, were neglected. Complaints about the firm’s service, such as being unresponsive to customer needs and the protracted process for resolution of issues, to name a few, are rife across the region.

Could a new player, with no real history in the Caribbean to speak of, but hopefully a different playbook from its predecessor, be the ticket? That is what people, from the average Joe to consumer interest groups and policymakers, across the region are hoping.

Diminished competition, diminished growth?

With the sale last year of Columbus International Inc., which had operated the popular brand, Flow, in the region to Cable & Wireless plc, in some countries where both firms had a presence, they have merged into a single operation. As a result, and for certain services, either a monopoly or a duopoly now exists. Unfortunately, due to the relatively small population sizes of most Caribbean countries, and their relatively mature telecoms markets, generally the region be seen as a hotbed for new, greenfield, infrastructure telecoms/ICT investment.

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