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Digicel Sues Cable And Wireless For Damages

by Robin Pilgrim, LawAndTax-News, London

24 July 2007

Last week Digicel Group Ltd, a fast growing wireless telecommunications operator in the Caribbean and Central America, issued a claim in the English High Court against Cable and Wireless plc and various of its subsidiaries, seeking multi-million pound damages.

Digicel claims that C&W had engaged in illegal behaviour by impeding and delaying Digicel’s entry into various telecommunications markets in the English-speaking Caribbean. Digicel claims that it has been the victim of a co-ordinated effort on C&W’s part to prevent and delay Digicel launching competing mobile telephone networks in St Lucia, St Vincent & the Grenadines, Grenada, Barbados, the Cayman Islands, Trinidad & Tobago and the Turks and Caicos Islands.

The suit alleges that obstructions and delays by C&W, between 2002 and 2006, have resulted in substantial damages and as a result Digicel’s claim covers:

  • Losses of revenue, profits and market share;
  • Restitutionary damages from C&W for the gains and benefits made by C&W as a result of its unlawful conduct; and
  • Exemplary damages (compensation in excess of actual damages) and interest.

The damages sought by Digicel would amount to several hundreds of millions of pounds, said the company. It is expected that the claim will come to the High Court in 2008.

Commenting on the claim Denis O’Brien, Chairman of Digicel said; “We are extremely frustrated with the continual illegal obstructions that we have encountered from C&W. We believe that a successful claim will not only compensate Digicel for the losses it has suffered but also that it will put an end to the anti-competitive practices of C&W. This will be of undoubted benefit to all network operators and more importantly all mobile users in the Caribbean.”

Cable and Wireless held a telecommunications monopoly in most of the Caribbean territories in which Digicel now operates. Whether due to rearguard action on the part of C&W or dilatory behaviour by local governments, the liberalization process - so important to territories struggling to compete in a globalized economy - has been slow and challenging for new entrants. Even when new licenses have been issued, Digicel complains that C&W has been uncooperative during the interconnection process needed to hook up new providers to existing infrastructure.

Cable & Wireless said on Friday that it had received a claim but said it would vigorously defend itself: "We don't believe it has any foundation," said a spokesman.

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