Falla concerned about Sure-Airtel takeover

Deputy Falla was the only member not in favour of the committee preparing to go to the States last July to ask for an exemption to be made to the island’s competition laws to allow the deal to progress.

However, it pulled the report when it emerged that the Jersey regulator had said it was not likely to give the takeover its support. This changed after it was announced that, on completion of the takeover, the CI Coop would be come a virtual operator, using Sure’s infrastructure, and this would make it an effective competitor.

The committee is now once again preparing to go to the States with its request.

‘There has been considerable time spent by the committee’s officers and advisors in arriving at this proposed solution which is not something that we should ever have been pursuing in my judgment,’ said Deputy Falla. ‘I remain uncomfortable with the States getting involved in a commercial transaction between two private businesses and I don’t believe it is good practice to bypass a law in order to do so.’

He said he respected the two companies involved but was concerned about the process proposed by the committee.

The Guernsey Competition & Regulatory Authority did not have the remit to take account of the economic and public policy benefits in this matter, he said, and it had not looked at the proposed deal.

‘We made a Competition Law only 12 years ago, which we are now looking to depart from temporarily. For these reasons the proposed exemption route does not feel proper or justified in my view.’

He added that legal advice had stated that this might have an impact on Guernsey’s free trade agreements with other countries where fair competition and anti-competitive practices are referenced.

‘How the exemption will be viewed externally has not been tested and is unknown,’ said Deputy Falla.

A GCRA spokesman said that the companies did not apply to it for approval of the transaction and instead asked the States to pass it on the grounds of ‘exceptional and compelling public policy’.

‘Economic Development has therefore been the party reviewing the arguments put forward by the parties as to why the transaction should proceed,’ he said.

Guernsey Airtel Limited has welcomed the Economic Development policy letter.

‘The proposed merger between Sure and GAL will strengthen the long-term sustainability of the telecom sector in the Bailiwick of Guernsey,’ said Airtel CEO Sid Ahlawat. ‘The consolidation will enable increased and viable investments in mobile network infrastructure, which will ultimately benefit consumers, businesses, and the telecom infrastructure efficiency. Furthermore, if the transaction is approved, all employees will transfer to Sure.’