LONDON, UK, 19 July 2007. Digicel Group Ltd (“Digicel”), the fastest-growing wireless telecommunications operator in the Caribbean and new entrant to the Central American market today issued a claim in the English High Court against Cable and Wireless plc (“C&W”) and various of its subsidiaries, seeking multi-million pound damages.
Digicel claims that C&W was engaged in illegal behaviour by impeding and delaying Digicel’s entry into various telecommunications markets in the English-speaking Caribbean.
Digicel also believes 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 obstructions and delays by C&W, between 2002 and 2006, have resulted in substantial damages and as a result Digicel’s claim covers:
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Losses of revenue, profits and market share;
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Restitutionary damages from C&W for the gains and benefits made by C&W as a result of its unlawful conduct and;
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Exemplary damages (compensation in excess of actual damages) and interest.
The damages sought by Digicel should amount to several hundreds of millions of pounds.
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.”
NOTES FOR EDITORS
Background:
For mobile telephone services to be provided by a new provider, it is necessary for them to ‘interconnect’ with any existing telecommunications provider operating a public telecommunications network in a territory. This is a physical process between two networks, without which customers of one network cannot call customers of another network. Local telecommunications legislation in the territories generally provides that any telecoms provider shall not refuse, obstruct or in any way impede another provider from making an interconnection.
In 2000 Digicel identified an opportunity in the Caribbean telecommunications market at a time when liberalisation and the introduction of competition across the region were underway.
Digicel particularly identified a potentially lucrative opportunity in the mobile telephone market in the Eastern Caribbean region because there was a low take-up of mobile phones within the residential population and Digicel was able to offer more modern technology and a better service than the monopoly provider, C&W.
Digicel recognised that a quick launch into the new market was important to coincide with the peak time for acquiring mobile phones (Christmas) and to attract new potential subscribers.
In 2000/2001 Digicel launched its mobile telecoms business in Jamaica very successfully, acquiring the necessary licence and achieving interconnection, albeit after experiencing some initial resistance from C&W, who until then had enjoyed a monopoly as sole provider. Digicel established its new GSM mobile network rapidly and achieved a high degree of market share very quickly.
Planning to expand into countries affiliated with the Organisation of Eastern Caribbean States (OECS – St Lucia, St Vincent & the Grenadines and Grenada) and Trinidad & Tobago, Barbados and Guyana, Digicel created operating subsidiaries in the territories identified above with a view to obtaining licences or concessions to operate mobile telecoms networks on these islands.
In the period from 2002 to 2006, Digicel was awarded licences to establish mobile telephone services in the territories which are the subject of this claim, and in each case immediately started the process to facilitate interconnection with C&W.
Without exception, in each territory, Digicel experienced resistance and obstruction from C&W. Indeed, in 2002 an internal strategy document produced by C&W revealed that C&W was intentionally delaying Digicel’s entry into these markets for as long as possible. This strategy, and the actions it gave rise to, clearly breached C&W’s statutory duties.
In St Lucia the launch by Digicel was delayed from before Christmas in 2002 until late March 2003; in SVG the launch was delayed by over 6 months; in Grenada it was delayed by 5 months; in Barbados by over 6 months; in Cayman by over 2 months; in Trinidad & Tobago by at least 4 months and in Turks and Caicos the launch was delayed by over 3 months.
Aside from lost market share and future profits, Digicel lost revenue from call charges and interconnection fees payable by C&W in respect of inter-network calls originating on C&W’s networks, costs and expenses arising from the unlawfully protracted process of interconnection in each territory, costs and expenses arising from the delayed launches, and lost management and staff time dealing with C&W’s unlawful behaviour. The claim is expected to total some hundreds of millions of pounds.
About Digicel:
Since launching in 2001, Digicel has become the fastest growing mobile telecommunications operator in the Caribbean and a recent new entrant to the Central American mobile market.
It is renowned amongst its customers for competitive rates, unbeatable coverage, superior customer care, a wide variety of products and services, innovative new technology and state-of-the-art handsets as well as community support and development. Digicel currently has in excess of 4.7 million subscribers and operations in 22 markets including Anguilla, Antigua & Barbuda, Aruba, Barbados, Bermuda, Bonaire, The Cayman Islands, Curacao, Dominica, El Salvador, French Guiana, Grenada, Guadeloupe, Guyana, Haiti, Jamaica, Martinique, St. Kitts & Nevis, St. Lucia, St. Vincent and the Grenadines, Turks and Caicos and Trinidad & Tobago.
Digicel directly employs more than 3,000 people. It is the lead sponsor of Caribbean sports teams including the West Indies cricket team, Special Olympics teams across the Caribbean, the Haitian and El Salvador Football Federations amongst others. It is also the title sponsor of the Digicel Caribbean Football Union Cup, which involves over 30 Caribbean countries and is an important qualifier towards the CONCACAF Gold Cup.
