LIME Jamaica won praise from its parent, Cable & Wireless Communications Plc (CWC), for increasing mobile traffic, which the UK-based company said resulted in the local provider topping a utility providers customer satisfaction survey.

At the same time, CWC told shareholders that its acquisition of Columbus International could stall or “not be implemented” unless regulatory approval is granted in four key markets, including Jamaica.

Approval is key for CWC to achieve its acquisition targets, including saving over US$145 million in capital expenditure following the deal.

“Completion of the acquisition is subject to the satisfaction of several conditions, including approval of our shareholders and certain structural arrangements in respect of Columbus International Inc’s business being implemented, in addition to the requirement to obtain regulatory approvals in Barbados, Jamaica, Trinidad and Tobago and the US,” CWC stated in its financials released Thursday.

“If these conditions are not satisfied, or, where applicable, waived, the acquisition will not be implemented or the implementation of the acquisition may be delayed and the benefits expected to result from the acquisition will not be achieved,” the company added.

On Thursday, CWC announced that it had purchased 100 per cent of the equity of Flow Jamaica parent company Columbus, which operates regionally for US$1.85 billion (J$207 b).

“Whilst completion of the acquisition is not conditional upon obtaining regulatory approvals in jurisdictions outside of those listed above, there are a number of jurisdictions in respect of which regulatory notifications and/or approvals may be required. The relevant authorities in these jurisdictions may impose conditions on the giving of such approvals (if required), may decline to give approval or may seek to otherwise intervene in the acquisition,” stated CWC.

“Additionally, there is a risk that competitors, customers, and/or third parties may seek to disrupt, delay or prevent completion of the acquisition. These actions might result in delays, financial penalties, suspension or removal of the relevant operating licence, or the imposition of unfavourable conditions in respect of those jurisdictions,” CWC said.

Rival provider Digicel has already voiced concern about the proposed acquisition, arguing that it presents “clear and obvious challenges” from a regulatory and competition perspective.

Questions e-mailed to the Office of Utilities Regulation (OUR) went unanswered up to press time.

The acquisition of Columbus would be “earnings neutral” in the first full year post-completion but become earnings positive in subsequent years. In fact, the acquisition is expected to create cost-saving of US$145 million in capital expenditure in the first three years. On the flip side, the acquisition will result in CWC assuming Columbus’s US$1.17 billion in existing net debt as at June 2014.

CWC will pay US$707 million cash and issue 1.5 billion new ordinary shares in CWC to entities that control Columbus, according to a 59-page document on the takeover. These include entities ultimately held by Columbus co-founder John Risley, co-founder and president Brendan Paddick and significant shareholder John Malone.

In its financials, CWC also credited LIME Jamaica for increasing mobile market share to one-quarter from one-fifth from a year ago, pointing out that LIME’s mobile revenues grew 38 per cent in the quarter.

“In Jamaica, mobile subscribers grew by 125,000 (20 per cent) in the period, as we improved coverage, capacity, speed and reliability. This drove a 73 per cent increase in mobile data traffic and resulted in LIME being ranked highest in customer satisfaction amongst all utility providers in Jamaica,” CWC said.

The 20 per cent growth in mobile subscribers resulted in a market share of 26 per cent, up five percentage points on last year, CWC added.