Cable & Wireless Communications Plc (CWC) has entered into a strategic alliance with Columbus Networks Ltd (Columbus) to develop its international wholesale capacity business.
 
Under the alliance, CWC and Columbus will form a joint venture in the pan-America region which will provide international wholesale capacity to both companies, as well as to third party carriers.
 
CWC and Columbus operate substantial and largely complementary sub-sea cable networks in the Caribbean and Central American region – the joint venture will have a network platform of approximately 42,000 kilometres with connectivity to 42 countries.
 
 Once the applicable approval requirements and conditions have been met, the joint venture will then assume ownership and management control of the international wholesale capacity operations of CWC and Columbus and all new investments in infrastructure will be made, and owned by it.
 
Cable & Wireless Communications Chief Executive, Tony Rice, said, “This joint venture aims to provide us with access to a secure, long-term supply of international data capacity to support our retail businesses in the pan-America region. It will also enable us to better monetise the excess capacity we have on our networks and in so doing offer high capacity and resilient solutions to our customers. The alliance will put both CWC and Columbus in a strong position in the growing market for international wholesale capacity.”
 
Columbus, through its wholly-owned subsidiary, Columbus Eastern Caribbean (Barbados) Inc., and CWC, through its wholly-owned subsidiary CWC WS Holdings Cayman Ltd, have entered into a shareholders’ agreement governing the management and operation of the joint venture, CNL-CWC Networks Inc. In consideration of their agreement, subject to satisfying the applicable approval requirements and conditions, to transfer certain assets to, and the entry into related commercial agreements with, CNL-CWC Networks Inc., Columbus has 72.5% and CWC 27.5% of the issued share capital of CNL-CWC Networks Inc.
 
The transaction is not expected to have a material impact on the Group’s earnings. CWC’s assets subject to the joint venture arrangement had a gross asset value of US$108.2 million, and recorded a loss before tax of US$0.9 million in the year to 31 March 2013. Columbus’s assets subject to the joint venture arrangement had a gross asset value of US$304.6 million and recorded a profit before tax of US$29.3 million in the year to 31 December 2012.

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