Friday, May 05, 2006

Cell Companies Joust to Wire the Caribbean

Saw this in my email recently. It's true. But what it leaves out is that in all this hype and excitement, we are not really thinking about what tools we need to raise our e-reasdiness index, to close hte digital divide. Getting a free cell phone is cool, but then - what about the monthly maintenance costs - how many people have the phone but no credit on it to use it? What about data access services? Competition has NOT dropped the price of data access, or of broadband (wireless or wired). At nearly US$600/month for 256k (wired) and the same price for 400k (wireless) it's beyond the reach of many.

Peter Richards

When he wanted to buy a new mobile phone, the only problem Kadeem Simon had was just how long he would wait in line to be served.

Armed with a newspaper, he had the luxury of deciding whether he wanted to acquire his phone from the long established monopoly, Telecommunications Services of Trinidad and Tobago (TSTT), or the new player in the local market, Digicel, an Irish-based company that is promoting itself as the fastest growing telecommunications company in the Caribbean.

"Competition is good. I may decide to buy my phone from TSTT, but I like the opportunity to examine others," said Kadeem, a 17-year-old secondary student for whom a mobile phone is not simply an instrument to answer calls, but also to play games, send text, take photographs and even shoot video.

"Before, we had no choice, we either purchased what was sold on the local market, or wait on friends from neighbouring Caribbean islands to send us phones that were much cheaper and had more features than what we were accustomed to," he said.

As he speaks, he opens up the newspaper, where every other page contains a full page colour advertisement from the two main players, offering various giveaways, including, in the case of TSTT, an opportunity for at least 30 football fans to receive an all-expenses paid trip to Germany to watch the "Soca Warriors", the Trinidad and Tobago football team, participate in its
first ever World Cup competition.

"The lines are so long, so many people are here looking for mobile phones. I will probably have to wait for at least an hour before I could get served, but I don't mind. I want to take advantage of the specials also," said Kadeem.

Kadeem's plight, or fortune as the case may be, is replicated in almost every Caribbean island, where in recent years, regional governments have sought to cash in on the lucrative telecommunications sector by liberalising the industry and ending the monopoly enjoyed by the British telecommunications giant, Cable and Wireless, since the 1930s.

Even the British Virgin Islands, the tiny British overseas dependent territory, is moving to liberalise its telecom industry and has introduced legislation establishing the Telecommunications Regulatory Commission (TRC), an independent body that would be charged with regulating the industry.

"Regulation is a necessary prerequisite to liberalisation. The regulator will be responsible for licensing new operators, managing interconnection and removing any barrier to market entry by new operators," said Communications and Works Minister Alvin Christopher.

"Telecommunication liberalisation is a very complex process that involves careful strategic measures. We encourage and support the introduction of competition, and in this light we not only want to create an independent agency, but also empower them to act effectively and efficiently," Christopher said.

In Guyana, the government of Pres. Bharrat Jagdeo has announced plans to end "the monopoly on landlines and international transmission services thereby creating a competitive telecommunication sector to ensure cheaper and better services to our people and businesses".

He said the government would grant a licence to Digicel to compete for cellular telephone customers.
The newly appointed regulatory bodies in the region have also sought to encourage competition other than between Cable and Wireless and Digicel, which together have spent millions of dollars on advertisements, sponsorships and other promotional activities in the Caribbean.

"Information has become critical to all aspects of human activity. Moreover, information that can be accessed by electronic means could empower people residing in the remotest parts of our globe," says Khalid Hassanali, chairman of the Telecommunication Authority of Trinidad and Tobago.
"Sadly, however, there is a wide sector of our global society deprived from accessing information by electronic means," he told a recent meeting of Caribbean telephone operators.

Despite being the wealthiest country in the English-speaking Caribbean, the digital access index for Trinidad and Tobago, which measures the overall ability of individuals in a country to access and use new ICTs, stands at 0.53, which is lower than that of Dominica at 0.54, Barbados and Antigua and Barbuda at 0.57, and St. Kitts-Nevis at 0.60. (In comparison, Sweden, which has the highest index in the world, is rated at 0.85).

Hassanali said that Port of Spain would conduct an extensive study later this year to determine which areas are under-served "and affirm obligations on concessionaries designed to ensure that all persons in Trinidad and Tobago have access to basic telecommunication services".
When he delivered his island's national budget on Wednesday, St. Lucia's Prime Minister Kenny Anthony said the information technology sector had the potential to ease unemployment and "absorb the hundreds who graduate from our secondary schools".

He said his administration was encouraging the e-service sector through the liberalisation of the telecommunication industry with the ultimate aim being "to provide all St. Lucians with the opportunity to enjoy a better standard of living".

"This sector has potential that must be explored... the strategy in the past of relying on preferential treatment for our bananas (in Europe) and insulating our industries from competition can no longer work in today's world," the prime minister said.

The Eastern Caribbean Telecommunication Authority (ECTEL), of which St. Lucia is a member, says it is discussing ways of providing more affordable telecommunications services with the entry of more small business providers.
"There is a general feeling that we have not done enough to bring small providers into the net and as a result the international voice user license is not being used as a mechanism to allow small providers to purchase services from larger providers and be able to resell," said Eliud Williams, ECTEL's managing director.

Last year, the British telecom company reported that its Caribbean business brought in an estimated one billion dollars, and earned an operating profit of 189 million dollars, more than its entire business in Britain.
Harris Jones, the CEO of Cable and Wireless International, said the healthy profits came despite new competition from other providers.

Jones, who was in the region attending a global meeting of Cable and Wireless companies last month, said that in terms of technology, the Caribbean is ahead of "some of the first world markets and in the case of broadband, the Caribbean is actually leading".

Digicel, which currently has operations in 16 Caribbean countries, says it is in the Caribbean "for the long haul".

"With 10 more Caribbean nations whose telecommunications marketplaces are yet to be liberalised, we expect exponential growth over the next five years," said Digicel's chairman, Denis O'Brien.

To mark its fifth year of operation in the Caribbean, Digicel said it plans to build a new state-of-the-art headquarters in Kingston for its Jamaican staff base of 1,000.

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