Ro Ann Wright LLB,LEC,LLM Legal Officer Eastern Caribbean Telecommunications Authority

1. TAKE ME OVER: The analysis of mergers in the member states of the Eastern Caribbean Telecommunications Authority. Ro Ann Wright LLB,LEC,LLM Legal Officer Eastern Caribbean Telecommunications Authority

2. The General Proposition • The Eastern Caribbean Telecommunications Authority and its partners the National Telecommunications Regulatory Commission should undertake an assessment of mergers/acquisitions involving individual licensees within the telecommunications sector in the ECTEL member states.

3. Reason for Merger Regulation • Mergers if left unchecked could damage the structure of the market. • Horizontal mergers result in the number of firms on a particular market and increase the market share of the merged entity. • It is probable that post a horizontal merger the newly merged entity can unilaterally exercise its market power and coordinate its behaviour with other firms in an anticompetitive manner.

4. Reason for Merger Regulation • With vertical mergers the predominant fear is that where a firm possesses market power in one market it may post merger utilize its dominance in one market to foreclose another. • Mergers also raise fears that have nothing to do with competition. • Authorities fear mergers could lead to overseas control of sensitive sectors and unemployment.

5. Merger Control Systems • Several competition law systems have included as an essential component the regulation and management of mergers. • Merger control enables authorities to regulate changes in the market structure by deciding whether two or more commercial companies may merger, combine or consolidate a business into one.

6. Proposed Merger Control in OECS • Draft OECS Competition Bill (draft bill) defines a merger as the cessation of two or more enterprises from being distinct entities and outlines a framework for the regulation of mergers which have assets of $EC25,000,000.00. • S. 22 of the draft bill requires enterprises desirous of effecting a merger to apply for permission.

7. Proposed Merger Control in the OECS • In applying for this permission an enterprise must satisfy the Commission of one of several outlined factors. For instance, an enterprise must be able to demonstrate that one of the parties to the merger is faced with imminent financial failure and that the merger is the least anticompetitive alternative. • Upon receipt of the application the Commission shall conduct an investigation in order to satisfy itself that the proposed merger would not affect competition adversely or be detrimental to the consumer or the economy.

8. Proposed Merger Control in the OECS • Where the proposed merger is likely to give rise to unfair competition the Commission may direct that enterprises within an agreed period divest the interest or part of their combined business or operators. • Where the Commission determines that the merger does not qualify for permission, it can prohibit the conclusion of the merger or allow the merger after it has been modified according to changes made by the Commission or have the parties enter into a legally enforceable agreement as specified by the Commission.

9. Merger control in telecommunications sector in the ECTEL member states • The draft bill has yet to be promulgated and there is no Competition Commission established. It therefore falls to the regulator to manage mergers in the telecommunications sector. • Current telecommunications legislation and regulations do not explicitly provide for merger regulation.

10. Merger control in the telecommunications sector in ECTEL member states • Basis for intervention may be found in the licences. • All licences require the prior consent of the Minister for a change in shareholding where immediately after the acquisition the change exceeds 25 % of the total number of shares in the licensee. • Individual licences debar the licensee from engaging in activities which are intended to or likely to have the effect of unfairly preventing, restricting or distorting competition in the market.

11. Merger Control in Telecommunications in ECTEL member states • Prior to the implementation of the merger regulations in Europe, it was held that the acquisition of a competitor which lead to the strengthing of a dominant position could be regarded as abusive. • It was also decided that although the acquisition by one company of an equity interest in another could serve as an instrument for influencing the commercial conduct of the other company.

12. Merger control in Telecommunications sector in ECTEL member states • Telecommunications regulators within ECTEL should based on the provisions in the licences exercise control over mergers involving the holders of individual licences. • Analysis would commence with the identification of the theory of competitive harm. • Once the theory has been identified the authority must adduce evidence in support.

13. Merger control in Telecommunications sector in ECTEL member states • The regulator must then compare the market structure if the merger goes ahead and the position if it did not happen. • After this assessment the regulator will decide on whether the merger should be prohibited, amended or permitted by the application of a substantive test. • Under the OECS draft Competition Bill the test is whether the merger would adversely affect competition or be detrimental to the consumer or the economy.

14. THE END THANK YOU!