“I need more regulation!” Interview with CWC’s Eddie Saints

You could be forgiven for thinking that Eddie Saints has an easy job.

Saints is CEO of Cable and Wireless Communications’ businesses in Guernsey, Jersey and the Isle of Man, which fall under the Sure Telecom brand.

These three idyllic island backwaters, which have a combined population of around 250,000, are perhaps best known as offshore tax havens for some of Europe’s richest citizens.

Look at Sure’s website and the “latest news” features stories about Christmas ice rinks and bowling alleys – in 2011.

So it’s something of a surprise when Saint’s, only half-jokingly, refers to our interview as “something of a therapy session”.

It’s equally unnerving when he reveals the source of his troubles – a lack of regulation.

That’s right, the CEO of an operator is demanding, even imploring for more regulation.

CWC is the €1.8 billion consumer part of the original Cable and Wireless business that split into two in 2010.

CWW, the enterprise part, was this week sold to Vodafone – a company whose CEO picked a fight with Brussels earlier this year over what he sees as overbearing regulation.

However, when it comes to talking about Jersey and the Isle of Man, Saints is the opposite end of the scale.

“Getting things done is like pulling teeth,” he said, muttering darkly about the anticompetitive behaviour of rivals and the abdication of responsibility of regulators.

Sure is the number two player behind incumbents Manx Telecom and Jersey Telecom in mobile, fixed voice and broadband.

The situation is particularly bad in the Isle of Man, according to Saints, who says he is at a loss to explain why the regulator will not update its laws that still “reflect the days of a monopoly”.

Sure entered the crown dependency in 2007 but is loss making despite investing tens of millions of euros.

The island’s communication commission admits the current regulation is not fit for purpose and began a strategic review in 2009, but no changes have come into effect since.

Saints says he has no idea of when changes will occur, adding that he has left meetings with the commission “knowing nothing will happen”.

While this situation persists, Manx Telecom has “clearly made anticompetitive moves, including price cutting,” claims Saints.

A press release on the commission’s website reveals there was an investigation into alleged breaches by Manx Telecom over mobile termination rates and tariffs in 2009.

However, following written assurances from the operator, the commission ruled that it “did not constitute an admission by Manx Telecom of any breach of its license conditions.”

Things are not much better in Jersey, where Saints said he is “struggling to get the business into a self-funding position” and providing some services at a loss.

The company is waiting for amendments to the existing regulation to be passed into law; Saints says it is possible this will happen by the end of 2012.

Again he pulls no punches, accusing incumbent Jersey Telecom of anticompetitive practice – “there are numerous example” – and says the regulator has “not paid enough attention to telecoms”.

It would be easy to write off these remarks off as the bitter ramblings of a business struggling to be profitable.

But when the authorities themselves admit there is a problem, you have to give the criticisms some credibility.

What’s more, research commissioned by CWC and carried out by law firm Watson, Farley and Williams, showed that of the 37 countries that CWC operates in, the Isle of Man hosts the second most ineffective system of telecoms competition law and regulation.

Saints also knows what it is to be number one – the company’s Guernsey business remains, as the former incumbent, the market leader.

The CEO has nothing but praise for the work Guernsey’s regulator has done to create what he calls “one of the best regulated markets I have ever worked in”.

To their credit, the regulators of Jersey and Guernsey created an umbrella organization 18 months ago in an attempt to provide some harmonization.

However, Saints says the pace of change has been too slow.

Can any blame be apportioned to CWC? For example, given they knew the regulatory situations before they entered the markets, how does the CEO respond to the charge that they were naïve or even mistaken to do so?

“We did know what we were going into,” admits Saints. “But all the right comments were being made [about changing the regulatory landscape.”

Despite these concerns, the CEO says the company is not about to cut and run.

“We are very committed to these islands. It would be easy to walk away, but we believe there will be change. All we want is a fair, level playing field.”

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