My Thoughts on Technology and Jamaica: US$5.5 billion Liberty Global purchase of CWC's FLOW Jamaica - Why Digicel Play will truly Liberate Cable Subscribers

Monday, October 26, 2015

US$5.5 billion Liberty Global purchase of CWC's FLOW Jamaica - Why Digicel Play will truly Liberate Cable Subscribers

“Liberty Global confirms that it is in discussions with the board of CWC regarding a possible offer for the entire issued and to-be-issued share capital of CWC”

Liberty Global in a statement on Thursday October 22nd 2015 as they attempt to buy out CWC (Cable & Wireless Communications) PLC

Even as FLOW Jamaica is dealing with an increase in users dissatisfaction with their service since they officially became FLOW as reported in my blog article entitled “74 Percent increase in FLOW Jamaica problems to OUR - FLOW's infrastructure problems as Digicel Fibre is coming”, a new Drama is unfolding

The Parent company of FLOW Jamaica, CWC (Cable & Wireless Communications) PLC is now involved in negotiations to buy a stake in the company as reported in the article “Flow In Buy-Out Talks, published Friday”, October 23, 2015 BY KARENA BENNETT Business reporter, The Jamaica Observer.

The potential stakeholder is Liberty Global PLC owned by billionaire American business executive John C. Malone, which is plunking down some US$5.5 billion to acquire CWC PLC. Interestingly, CWC PLC has a market value of US$4 billion (£2.6 billion) in London, which balloons to US$8 billion once debt is included.

US$5.4 billion in debt is a lot to sacrifice just to get access to a company. But for John C. Malone, Chairman of Liberty Media, Liberty Global, and Liberty Interactive thinks he might have a chance at getting CWC PLC, having been involved in large acquisitions before.

If this deal goes through by November 2015, the reign of the once might CWC Telecommunications group, which has been operating for 150 years, will come to an end.

Liberty Global to purchase CWC's FLOW Jamaica - 6 million customers in the Caribbean to be Liberated

Liberty Global is doing what's natural for a predatory company of its size; expanding their presence in the Caribbean and elsewhere.

Though they're not a Telecom operator, they do have interest in Subscriber Television operations around the world in 14 countries with some 27 million customers.

They also have a stake in Cable Television operations in the Caribbean, as John Malone was a shareholder in Columbus International Inc, the company that CWC PLC had purchased for US$1.9 billion in cash and stock in November 2014 as reported in my Geezam blog article entitled “LIME Jamaica Goes with the FLOW thanks to Caribbean-wide Survey”.

His stake in Columbus International Inc has landed him a 13% voting stake in CWC PLC.  But typical of billionaires, they want it all as evidenced by previous Cable Company acquisitions around the world.

One such notable deal is the acquisition of UK's Virgin Media Inc, which they purchased for US$23.3bn (£15bn) in February 2013 as reported in the article “Virgin Media bought for £15bn by Liberty Global”, published Wednesday 6 February 2013 by Juliette Garside, The UK Guardian  and “Liberty Global to buy Virgin Media for $23.3bn”, published 6 February 2013, BBC News.

 The other was the purchase of Dutch cable operators Ziggo NV for US$9.4 billion as reported in the article “Liberty Global to Buy Ziggo for $9.4 Billion”, published Jan. 27, 2014 By ROBIN VAN DAALEN, Wall Street Journal and “Malone’s Liberty Global to Buy Dutch Cable Provider Ziggo”, published January 27, 2014 by Kristen Schweizer and Elco van Groningen, Bloomberg.  

Combined, these purchases have made Liberty Global the largest international cable operator. So a purchase of CWC PLC to get access to FLOW Jamaica makes sense, as they'd potential gain access to some six (6) million subscribers for Cable, TV, Broadband Internet, POTS (Plain Old Telephone System) and 3G Mobile Internet in the following countries and regions:

1.      Caribbean
2.      Panama,
3.      Monaco
4.      Seychelles

But if he already owns half the world, what does Liberty Global want with a mere six million additional subscribers?

Liberty Global Subscriber Cable Domination – Flow Jamaica to get LiLAC Treatment

Apparently the Chairman of Liberty Media John C. Malone suffers from an OCD (Obsessive Compulsive Disorder) as he likes things being organized.

So to him, to sacrifice US$5.5 billion to acquire CWC PLC and its US$5.4 billion in debt is all so that he can organize Subscriber Cable service across the world. Liberty Global has also taken a fancy to “quad play” services and hopes to expand this vision in all its territories, which span Europe, the Caribbean, and Latin America.

To quote Liberty Global Chief Executive Mike Fries, they think they can solve the jigsaw puzzle in the Caribbean as it relates to Cable Services, quote: “......the region as a whole requires massive consolidation. It is fragmented. It is underpenetrated. It is inefficient. If there was ever a part of the world that would benefit from the kind of things we do, in terms of bringing rational consolidation to these broadband connectivity platforms, we think this is”.

If by November 2015, CWC PLC gets purchased, Liberty Global, which already offers cable service in Puerto Rico and Chile, will house the FLOW Jamaica and FLOW Caribbean portions of under LiLAC, their stock ticker to track all their Latin American and Caribbean holdings.

Digicel Play as the counterweight to FLOWJamaica - Why Liberty Global may face stiff competition

So what of Digicel Play, the rebranded version of Telstar Cable that Digicel had acquired in September 2014 as part of their Caribbean Wide Cable Network as described in my blog article entitled “Digicel officially acquires Telstar Cable – Why Digicel is launching IPTV Streaming over 4G LTE using 20 Years of Cable TV History”?

Turns out they're rebranding Telstar Cable as Digicel Play and are rolling out their services in Jamaica, Dominica and PNG. I've been unable to locate any Jamaica Gleaner or Jamaica Observer articles on Digicel Play and ironically only my Geezam blog article entitled “Digicel Sportsmax NBA deal means fiber and 4G LTE coming this year”.

So says a very sparse tweet from Television Jamaica @televisionjam on Monday June 29th 2015

Later on October 15th 2015, Telstar Cable @TelstarCableLtd has endorsed the name Digicel Play in a very simple tweet linked to a Facebook posting

Since October 2015, I've been spotting Vans rebranded with the Digicel Play Logo and so too have a few Twitter fans such as Ruby Wu-Tang Clan @francinederby:

I've also met Digicel Play representatives on foot walking through Swallowfield signing up potential customers. The Twitter chatter once you do a search for “Digicel Play” shows a lot of interest in the service, with some even posting some insane Broadband Internet Speed test results for Digicel Play as pointed out by AleJancro @Russ_FTW:

However, it was Richie @Richie_FUUU that finally gave me some information that'll be the basis of another blog article:

Hopefully by then Digicel Play, already in Dominica, Turks and Caicos and PNG (Papau New Guinea) and slowly rolling out in Jamaica would have launched to provide a counterweight to this coming Juggernaut of Global Cable by Christmas 2015.

Liberty Global may be coming to organize and Liberate the Caribbean Subscriber Television scene, but what will this means for FLOW Jamaica subscriber exactly? Stay tuned to my blog

 Here’s the link:

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