For some, it might look like a team resembling the Bad News Bears: John Risley and Michael Lee-Chin are partners in Columbus Communications, a fledgling cable and communications company based in Bridgetown, Barbados. After all, Lee-Chin's AIC Ltd., based in Burlington, Ont., has fallen from grace in the mutual fund industry because of disappointing returns and last year's announcement that it would pay $59 million to unitholders affected by its market timing practices. Then there's Risley. He's the chairman and biggest owner of Bedford, N.S.-based Clearwater Seafoods Income Fund, a trust that in October suspended cash distributions. To make matters worse, in August Risley called CSIF units undervalued and said they represented an opportunity for a significant return. In the short-term, at least, that call appears to have been a bad one. CSIF units are down roughly 30% since Risley's announcement.
Columbus's situation in the Caribbean even looks like a Bad News Bears movie, in that the young firm is the clear underdog. Cable & Wireless, the London-based communications giant, has an over 100-year history and roughly three million customers in the region. Columbus has just 200,000 subscribers thus far. Is there any hope for a happy ending for Risley and Lee-Chin's $200-million venture?
Maybe. Columbus and Cable & Wireless will go head-to-head on high-speed Internet and voice-over-Internet-protocol telephony, but the market for those services still seems to be up for grabs. Both companies introduced VoIP into the region only this year. What's more, Internet usage in the Caribbean stands at just an estimated 10%. As well, each firm offers compelling services the other doesn't. Cable & Wireless sells fixed-line and wireless phone service, while Columbus supplies digital TV.
If there's an X-factor, it's regulation. Risley acknowledges some Caribbean governments have a stake in Cable & Wireless's operations and enjoy dividends from those investments. On the other hand, some governments want competition in the communications industry to encourage investment in infrastructure, which in turn should improve economies. Lee-Chin, with his Jamaican roots and charismatic nature, could prove to be an MVP in this area.
Risley is optimistic. In fact, he doesn't see why Columbus can't triple its number of subscribers over the next couple of years. If Risley and Lee-Chin can pull off that feat, the two just might recapture their all-star status.
