By Garvey Louison FCCA
In part two of a two part series I attempt to introduce a workable solution based on the successful strategy applied in the breaking up of AT&T in the United States and the introduction of competition to British Telecom in the United Kingdom in the 1980s.
The OECS Ministers responsible for Telecommunications finally met in St. Lucia to discuss the acquisition of Columbus International by Cable and Wireless Communications.
They emerged from the meeting with two lame strategies:
(1). To find some way to stop the acquisition by way of legislation; and
(2). In the event that strategy one fails to lay-wait the combined entity and refuse to grant it a licence when the right time comes.
Both strategies would fail. First the OECS is in no position to dictate the business combination of two multinational companies. Once the shareholders and the players who exercise dominant influence over the entities agree to a legitimate business combination the deal is done.
Secondly the combined entity will now own and control huge chunks of our telecommunications backbone including our interconnectivity and broadband network capability. The granting of a licence will be reduced to a fundraising exercise.
Thirdly, there seems to be an underlying assumption that the role of our people in this industry is restricted to consumption. Therefore the focus of the meeting was on the measures to be adopted for the protection of consumers.
Maybe we just don’t get it. This is a multi-billion dollar business in which the transaction is simple beyond belief. These companies provide our people with services that we are basically addicted to and in return we borrow, beg, dig, eke-out or salvage our pennies to them for repatriation out of the region. It is a cash cow business. From time to time we get sponsorship of a handful of token activities.
It is the view of this writer that the time has come for our people to move up the food chain. We should not be just consumers anymore. The time has come for our companies and organizations to extract their rightful portion of the telecommunications pie.
Paradoxically, the new combined entity would be happy to farm out several areas of their operations to local contractors, including repairs and maintenance, audio and video production, local network services, business and retail services, marketing and promotion, training and development and several other areas.
The ministers should have spent their time looking forward. They should have established an urgent task force of probably five members from various disciplines to produce a white paper on the future of the OECS telecom industry.
The objective of the white paper should be to outline a strategy for the participation of local and regional players in the new market place given its substantial growth opportunities and extraction of benefits from this industry cash cow.
The delivery schedule should be as follows:
(1). Delivery of a draft plan – 40 days
(2). Review of the draft plan by ministers – 20 days
(3). Amendment and production of second draft – 20 days
(4). Public consultations on the revised draft – 30 days
(5). Production of final document – 15 days
The following factors, inter alia, should be considered in detail.
• The proposed structure of the industry;
• The segregation of promotion from regulation;
• The role of multinational players within the industry;
• The role of local and regional players within the new setup;
• Government’s enabling involvement in the process; and
• The democratisation of the process and the involvement of the people at every step of the way.
The following areas should be considered for sharing between the multi-national companies and the local and regional players.
(1). The international broadband business network including corporate and wholesale markets;
(2). International internet business;
(3). Retail services to business and residential customers;
(4). Network services including cloud services, network capacity and call termination services;
(5). Research and development operations;
(7). Broadcasting and interactive TV, including content provision and audio visual development; and
(8). Other services including hardware maintenance and stand-alone operations.
In his latest submission, Denis O’Brien, the Digicel executive chairman, proposed that a third party should be injected into the fray in an effort to preserve competition. Well, Mr O’ Brien, we in the OECS happen to have met this third party and that third party is us.
The ministers need to meet again urgently. There is need for a paradigm shift in their thinking. The acquisition has been approved by the shareholders and is a done deal. To attempt to frustrate the combine entity by slighting them over the granting of a licence will fail.
Our people must be mobilized immediately and empowered to invest, participate and obtain their rightful share of the new and exciting technological developments to come. Only then will production increase, unemployment will fall and prices everywhere will be reasonable to the consumer.
(Garvey Louison FCCA is the CFO of GRENCOMM Ltd, a struggling Grenadian telecommunications company)