My Thoughts on Technology and Jamaica: US$36 million purchase of CWP S.A by Grupo Sonitel – CWC’s subsidiary Acquisition in Panama marks Latin American Expansion for CWC

Wednesday, September 10, 2014

US$36 million purchase of CWP S.A by Grupo Sonitel – CWC’s subsidiary Acquisition in Panama marks Latin American Expansion for CWC

“This transaction is in line with the strategy we outlined in May to grow our business (B2B) and government (B2G) capabilities. Adding more than 350 IT software and telecoms service engineers to our team will considerably boost our capabilities in this field”

CEO of CWC Phil Bentley in a News release on Friday August 29th 2014 on the recent acquisition of Grupo Sonitel by CWC subsidiary CWP S.A. (Cable & Wireless Panama)

While Telecom Provider Digicel is spreading its wings in the form of a Caribbean-wide Cable Network that’ll power it’s 4G LTE Ambitions as noted in my Geezam blog article entitled “Digicel Turks and Caicos thinks Streaming over 4G LTE by buying Cable TV Internet Provider”, Telecom Provider LIME is doing likewise.

They’re recently acquired this as CWC subsidiary CWP S.A. (Cable & Wireless Panama) on August 29th 2014  announced that they’d recently acquired Panama-based Grupo Sonitel for US$36 million as stated in the article “Cable and Wireless enters three new markets with Panama acquisition” Published Friday August 29, 2014, The Jamaica Gleaner.

CWP S.A buys Grupo Sonitel – CWC’s subsidiary Acquisition in Panama by the numbers

Cable & Wireless Panama, over which CWC has both Management and Board Control, has a curious ownership structure that breaks down as follows:

1.      49% by the Cable & Wireless Communications
2.      49% by the Government of the Republic of Panama
3.      2% held in trust on behalf of the employees of CWP S.A

CWP S.A main businesses in Panama include:

1.      Fixed Line
2.      Mobile
3.      Broadband
4.      Cable IPTV
5.      Enterprise Services

The purchase of Grupo Sonitel is expected to be profitable as since the year ending December 31st, 2013, they've been clocking revenues of up to US$77 million from continuing operations.

The purchase of Grupo Sonitel consists of two (2) companies:

1.      SSA Sistema, a provider of manager IT solutions and Telecoms Services to Corporate, Enterprise and Government customers in Panama
2.      Sonset is a providers of IT Solutions to SME (Small and Medium Enterprise) Customers in Panama

This acquisition of Grupo Sonitel, which was established in 1957, nets them some 350 skilled IT Technicians and Telecom Engineers as well as a company that's strong on Vendor Certification partnerships:

1.      Cisco Gold Partner
2.      Oracle Platinum Partner
3.      VMWare Enterprise Partner
4.      HP Platinum Partner

The acquisition also nets CWP S.A Corporate, Enterprise, Government and SME customers in the following countries:

1.      Panama
2.      El Salvador
3.      Peru
4.      Nicaragua

All this is in keeping with their long term vision of netting more B2B (Business to Business) and B2G (Business to Government), which is just a fancy way of saying Corporate, Enterprise, Government and SME customers.

As usual, the concession speech by President of Julio Spiegel R., a 44 year veteran of Grupo Sonitel, quote: “With our customers and team in mind, joining Cable and Wireless Communications was the best choice to secure the future of Grupo Sonitel. By bringing together CWC's communications and network capabilities with Grupo Sonitel's hosted solutions and IT expertise, we will be able to deliver an unbeatable offer to our customers”.

CWC purchase of Grupo Sonitel – Telecoms Engineers to build Jamaica’s 4G LTE Network

This purchase is significant, as it explains the sudden influx of Latin American Technicians into Jamaica to work as contractors to upgrade Telecom Provider LIME Cell Sites to provision 4G LTE as I'd pointed out in my blog article entitled “LIME chooses AWS for 4G LTE – AWS  Link Budget difference reduces Shadowing as It’s all about Optimization and Human Nature”.

As I’d explained, despite the spectrum being in the 2100 Mhz range, it's got better bandwidth and is more business friendly, as the CPE (Customer Premesis Equiptment) at the persons home would basically have an antenna placed outside. Even Mobile customer using AWS spectrum wouldn't notice much of a difference, as to use high Speed Data Services like 4G LTE on a smartphone, you'd be so thoroughly engrossed that you'd have to stop at one place and access the Internet.

Hopefully this increase skilled base will mean that LIME Jamaica will see the rapid build out of not only 4G LTE but also LIME TV as an IPTV Service as described in my blog article entitledLIME experiences 25% increase in Profits due to MTR - 4G LTE and FTTH like Bahamas with IPTV Streaming LIME TV will give LIME 3 Days to Kill”.

Thus like Telecom Provider Digicel acquisition of Telstar Cable in Jamaica as part of their Caribbean expansion into Cable TV and eventually Streaming TV as predicted in my blog article entitled “Digicel acquires Telstar Cable – 4G LTE with a dash of Streaming Cable TV Service”, expect to see CWC use this acquisition to expand into more Business Services for Corporate, Enterprise, Government and SME customers in Central America.

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