BRIDGETOWN, Barbados-As Cable & Wireless positions itself to be the company of choice in wireless, Internet and its traditional bread-and-butter service, long-distance communications, some start-up companies are claiming it might well continue to hold the upper hand when the doors to competition are flung open.
In Grenada on 7 April, Cable & Wireless reached an agreement that will see the telecommunications sector in St. Vincent and the Grenadines, St. Lucia, Grenada, Dominica and St. Kitts and Nevis being fully liberalized in another 18 months.
That agreement was hailed by the countries’ leaders and Errald Miller, Cable & Wireless chief executive officer (CEO) for the region, as a major plank of future social and economic development. Earlier this year, relations were at a low, with Cable & Wireless threatening to pull out of St. Lucia due to the absence of a new contract prior to 31 March.
Cellular and Internet services are among the first areas of competition to be phased in, with some government leaders reporting strong interest by prospective start-up companies. However, cellular companies will initially have to route long-distance traffic through the incumbent.
In Jamaica, Digicel was awarded one of two mobile licenses in 1999 and began service in April, amid concerns that local cellular rates will increase.
Cable & Wireless advertised in March that a call from its fixed line to the Digicel cellular network would cost $12 Jamaican (US$0.27) per minute, compared to $5 Jamaican (US$0.11) for calling from land to a Cable & Wireless cellular customer.
Winston Hay, executive director of the Office of Utilities Regulation, confirmed in the Jamaica Observer newspaper that Cable & Wireless’ cellular rates are expected to increase. Hay said that Cable & Wireless is subsidizing its cellular service from revenue generated from international calls, but would not be allowed to continue this practice after September, when the telephone company’s rate structure comes up for review, the Observer reported.
“It is quite clear that come September, when we have to look at Cable & Wireless again, that costs for using its system will be higher than they are now,” Hay remarked. “The cost of cellular service is going to be higher for everybody.”
Digicel’s CEO Seamus Lynch said the company offers a clearly superior service to Cable & Wireless with better reception between towns to facilitate intra-island business travelers. The carrier plans to bill customers for the time actually spent on the phone and to offer a prepaid service in addition to four postpaid options.
A third cellular company, Centennial Digital, is expected to begin operations in Jamaica by year-end.
Technical sources said the radio spectrum in most Eastern Caribbean countries should accommodate at least two mobile competitors to the incumbent monopoly operator.
While investors’ interest is reported to be keen for wireless licenses, agreement on a spectrum plan to determine the bands, types of licenses to be invited and the method of awarding licenses remain key to attracting competitors.
Cable & Wireless has been expanding its digital mobile network in the Caribbean and plans to offer cellular roaming regionwide.
