LIME responds to WestStar, Logic deal

14 Aug 2014

Cayman Islands telco Cable & Wireless, which operates under the LIME banner, has responded to the proposed transfer of the ownership of domestic telecoms operator WestStar from Botcat Holdings to WestTel Limited (trading in the country as Logic). Although LIME pointed out that it ‘does not object to the transfer per se’, it did note that the transaction will raise a number of significant issues that must be addressed before final approval, if sustainable competition is to continue to develop in local telecoms markets. LIME claimed that the telecoms regulator, the Information and Communications Technology Authority (ICTA), must address the concern that the combined entity will dominate the market for cable TV distribution services, with an estimated 90% of the sector ‘if only duly licensed and authorised service providers are considered’. Further, the operator noted that WestStar is presently dominant in the market for broadcast TV services, and that the proposed transfer of WestStar to Logic will in fact exacerbate the situation by combining Logic’s broadcast television operation with WestStar’s two channels. LIME is recommending that the ICTA determine that the combined entity will be dominant in the market for broadcast television services, prior to consenting to the transfer of WestStar to Logic under section 25(1) of the Information and Communications Technology Authority Law (2011 Revision, known as the ICTA Law 13).

In terms of fibre network rollout commitments of the two merging companies, LIME recommends that the regulator impose revised licence conditions on the combined entity, under which both WestStar and Logic must complete the rollout of their respective fibre access networks to 100% of the resident population of Grand Cayman by 8 February 2017; LIME added: ‘If Logic can do so for itself, it clearly can do so for the combined entity.’

Further, LIME noted that Logic and WestStar presently control a significant amount of spectrum in the 2100MHz and 2500MHz bands, which is utilised for various purposes. However, the cellco highlighted that, with the aggressive fibre network deployments of the two entities and the improved services available over fibre compared to wireless networks, the combined entity would no longer require the spectrum and should return a portion of it to the regulator for redistribution among domestic wireless operators.

As previously reported by TeleGeography’s CommsUpdate, in July 2014 Bermuda-based KeyTech Holding Limited, which owns Logic Cayman, entered talks to acquire Botcat Holdings, the parent company of WestStar. A press statement read: ‘Botcat owns WestStar TV Limited in Cayman and a significant interest in CableVision Holding Limited in Bermuda. Following completion of the acquisition, KeyTech will have a controlling interest in Bermuda CableVision Limited.’ The transaction is subject to a number of conditions, including regulatory approvals from the relevant authorities in both Bermuda and the Cayman Islands. Subsequently, the ICTA published a notice in the official gazette, stating that consent for the transfer of ownership ‘should not be unreasonably withheld’ and invited all interested parties to submit their comments on the topic by 14 August 2014.

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