When Bartel and Cable and Wireless (C&W) consolidated its business some years ago to operate under the one-name C&W it made sense. Back then Bartel managed the local business and Cable and Wireless managed the outbound traffic. In 2008 when C&W rebranded its Caribbean operations to LIME (Land, Internet, Mobile and Entertainment) the reaction was what the hell! The word LIME in the Caribbean lexicon does have a meaning which one has to admit is not complimentary in a business context.
The rebranding exercise immediately signalled major restructuring in the company which continues today. In Jamaica CEOs are being changed like dirty socks. In Barbados significant numbers of LIME employees have been retrenched and there is promise of more to follow – all in the name of balance sheet efficiency and creating a more competitive entity. LIME formerly C&W after comfortably raking in profits operating in the Caribbean as a monopoly since colonial days has now been jolted it seems by the deregulation sweeping the telecommunications industry globally.
Many decisions which LIME has taken since rebranding continue to baffle observers. Many people on the street are convinced C&W is planning an exit strategy from the Caribbean in the face of the onslaught from competitor DIGICEL in the mobile arena.
News making the rounds in the British financial market suggest the telecommunications behemoth maybe engaged in a demerger strategy of its UK operations from the international. The economic collapse of the global economy appears to have stalled rollout of the plan. The improvement seen in the financial markets in recent months analysts are predicting the parent Cable & Wireless may push ahead with the plan to demerge.
What is a demerger?
The act of splitting off a part of an existing company to become a new company, which operates completely separate from the original company. Shareholders of the original company are usually given an equivalent stake of ownership in the new company. A demerger is often done to help each of the segments operate more smoothly, as they can now focus on a more specific task. opposite of merger – InvesterWords.com
If Cable & Wireless is in the throes of a demerger the Caribbean should expect to see more changes coming down the pipeline. Barbadians no doubt are waiting to hear about the success of relocating Contact Centres to the low cost jurisdiction of St. Lucia. Do we recall correctly that Barbadians were promised better service six months after the relocated call centres were setup in St. Lucia?
In defence of LIME, operating in the small and disparate markets of the Caribbean cannot be easy given the monolithic business model inherited from the colonial period. It (LIME) seems to be implementing a model which other international and pan-Caribbean companies are gravitating to, hub and spoke.
If or when C&W goes public with its demerger strategy in the coming months; we see major fallout from the exercise for many of the countries in which LIME now operates. The fat-trimming exercise will cause some more pain. Given LIME’s leadership position in many of the small Caribbean markets regarding employment and high contribution to the GDPs, life is about to get interesting.
We did not even mention the role the unions will play!
The blogmaster invites you to join the discussion.