Mar 2015 Financial News

NEL, C&W begin talks on TSTT

Mar 17, 2015

National Enterprises Limited (NEL) the major shareholder in Telecommunications Services of Trinidad and Tobago Limited (TSTT), said yesterday it had no objection to Cable and Wireless Communications (CWC) re-entering the local telecommunications market after purchasing Columbus Communications International, the parent company of local telecoms provider, Flow.

Executives of NEL and CWC met at the Hilton Trinidad, St Ann’s,esterday to begin negotiations for the orderly disposal of CWC’s 49 percent shareholding in TSTT. NEL holds the remaining 51 percent on behalf of the Government.

NEL chairman Kenny Lue Chee Lip told Newsday yesterday, “the market, the Telecommunications Authority of Trinidad and Tobago (TATT) and the Government has a position that they want three players in the telecoms market and, of course, we have agreed with that in principle and we will do what we can to facilitate that so we are not objecting to their entry into the market as the third mobile provider. We will facilitate as best we could, but ensuring that that facilitation doesn’t ensure the death of TSTT.” The majority trade union at TSTT, the Communications Workers Union (CWU) has strongly objected to CWU re-entering the local market as a competitor to TSTT.

The union has said if CWC is allowed to return to the local market, competing with TSTT by offering the same products they would have a competitive advantage by knowing TSTT’s business operations and financial position. However, the acting Chief Executive Officer of TATT, Cynthia Reddock-Downes, said the authority did consider all these factors in coming up with its decision and conducted “quite an extensive and intensive review of the market and competition within Trinidad and Tobago before it came to its decision.”

She said TATT told CWC that once an agreement was reached for the divestment of its shares it would have to suspend all its shareholder rights in TSTT, including the right to appoint directors to the board and take no further part in TSTT’s affairs. She said CWC has already agreed to this condition and that it would remove its four directors from the board of TSTT once an agreement is reached with NEL for the sale of its TSTT shares.

She added that the issue raised by the union of CWC’s familiarity with TSTT’s business information was one of competition and TATT did not see it as a real issue because of the rapid changes in the telecommunications industry. It would also be some time before the divestment and CWC’s entry into the market occurs. “A lot depends on how soon Cable and Wireless are able to divest or to come up with their divestment plan in TSTT, how soon they are able to come up with their investment portfolio for which we would give approval and how soon they would be in a position to tell us, after consultation with NEL, what divestment plan they have agreed between themselves.

It would certainly take some time as well for them to start up operations when that does actually occur in Columbus and again that would be some time and space between themselves and TSTT,” she said.

Lue Chee Lip said the talks had only set the framework for what needed to be discussed “and we put forward our position: our main point that we are stressing to them is in accordance with the mandate of the TATT letter to Cable and Wireless where TATT says that part of the agreement is to make sure that the assett — TSTT — remains competitive. And that is our main focus of the discussions — to seek the interests of TSTT to make sure that it remains a viable entity.”

Source:
By VERNE BURNETT
Newsday
Tuesday March 17 2015

http://www.newsday.co.tt/business/0,208416.html