July 19, 2007 07:53 ET
High Court Action by Digicel Against Cable & Wireless Over Unlawful Behaviour
LONDON--(Marketwire - July 19, 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
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
The 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
The damages sought by Digicel should amount to several hundreds of millions
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
NOTES FOR EDITORS
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
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.
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.
Visit www.digicelgroup.com for more information on Digicel.