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Barbados: Cable & Wireless Monopoly Will End In 2002

Lisa Ugur, Tax-news.com, London

27 November 2000


It's a case of peaks and troughs for telecommunications giant Cable & Wireless (C&W). Whilst the company enjoys a monopoly in the Caribbean - only last week it was reported that C&W made more than US$30m profit from its British Virgin Islands operations during last year - it also learned last week that its monopoly in Barbados will end in 2002.

Speaking to the House of Assembly, Barbados Prime Minister Owen Arthur said that the prevailing telecommunications monopoly structure was 'incapable of adequately satisfying the demand for increased delivery of telecommunications services.' The government has thus agreed in principle on a new telecommunications reform policy, a green paper on which will shortly be presented to Parliament. Under the new telecommunications policy, the monopoly agreement with C&W will come to an end in 2002 instead of 2011, with full liberalisation to be phased in from December 1 this year.

The timetable is as follows:

- Under Phase 1 (December 1 to March 31 2001), the government will introduce competition into the cellular telephone market through the granting of new licenses.

- Under Phase 2 (April 1 to December 31 2001), the government will introduce competition in the provision of domestic telephone services through the granting of new licenses.

- Under Phase 3 (January 1 2002 to December 31 2002), the government will grant additional licenses for the provision of international telecommunications services.

Mr Arthur said that a new regulatory framework would form a "critical part" of the telecommunications policy, the aim of which would be to protect consumers from unfair pricing and practices and to encourage investment by permitting investors to earn fair returns to ensure quality of service.

What is somewhat surprising is that C&W has agreed to give up its monopoly with no demand for compensation. Trevor Clarke, CEO of C&W Bartel and C&W's regional director for Barbados and the Eastern Caribbean, said that there would be no claim for financial recompense. Instead, he said, 'we are getting the opportunity to remain in Barbados and continue to serve our customers for a fair and reasonable return on our investment.'

In an interview with Caribbean newspaper the Broad Street Journal, Mr Clarke stated: 'We recognise that the world is changing, and that it is better to be a willing partner in that change with an eye to making a better future for our company than to try to resist, even if we felt we could win (in the law courts).' He said that C&W was willing to negotiate with any new player seeking to provide telecommunications services in Barbados, whether for cellular, domestic or overseas services.

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