EDITORIAL

The Telecom Battle Begins

Thursday, March 4, 2004

Much like the first eight months of World War II, the telecommunications competition since the liberalisation paperwork was signed last July has had the feel of 'The Phony War."

Despite much anticipation from Cayman Islands consumers for lower prices, better services, and more choice in telecommunications, it has pretty much been a case of duelling press releases mixed in with tactical advertising and strategic photo opportunities. 

Wednesday, 3 March 2004 will be remembered as the day when all of that changed, when liberalisation commenced in earnest, when the telecom battle really began. It is quite possible that for one of Cayman's three participants in the fray, Cable & Wireless, Digicel and AT&T Wireless, it will be a fight to exist.

Many involved in the telecom process have wondered whether or not a limited Cayman Islands population of less than 50,000 can realistically support three major players here. CaymanTel bowed out of the competition for this very reason, despite spending tens of thousands of dollars in business development expenses and even receiving approval in principle of a telecom licence from the Information and Communications Technology Authority (ICTA).

The ICTA was instructed by the Government not to limit the number of telecom licences, and to approve all who applied and met the licensing criteria. In this way, normal market factors would decide who lasted, and who did not.

The first trait necessary for any new entrant into Cayman's telecom market was having the confidence and courage to stay in competition in the first place, which some companies did not.

Now it is a three-way fight between three big players, all who bring something different to the battlefield; the incumbent Cable & Wireless, with their decades of familiarity with the Cayman Islands and infrastructure to provide full service; AT&T Wireless, with years of experience in the US market and their resulting ability to offer state-of-the-art technology at prices lowered by the economies of scale; and Digicel, with their focus on the Caribbean and their battle-hardened experience in competing against the incumbent in each of the other six countries in the region in which they have launched.

There are reasons why each company should do well here, but in the end, the battle will likely come down to good old-fashioned business savvy. Besides pricing, the business precepts of planning, management, marketing and customer service will all play important roles in not only the bottom lines of the telecom competitors, but also in their very survival. 

So far, at least when it comes to their official launch, Digicel has certainly shown a cohesive planning strategy by bursting into the market with a flair that has captured the imagination, and attention, of the public.
Digicel's extensive marketing and public relations campaign undoubtedly will cost them a lot of money, but considering they are protecting a US$20 million investment so far, with another US$10 million to come, it seems a wise business decision.

In a war that will be fought from household to household and from business to business, every customer will count, and making a big splash onto the scene with a media blitz and free concert will likely go a long way in winning over the hearts and minds of potential customers. 

With the three competitors showing different styles of marketing approaches, it will be interesting to see how their plans of attack unfold, and ultimately, which of companies comes out ahead in the telecom battleground of the Cayman Islands.

Back...