Two of the hopeful recipients of telephone licences in Cayman have made public their cases as to why they should be chosen, signifying the

Telecom Battle Begins

Upper management of two of the major contenders for entry into the Cayman Islands' post-liberalised telecommunications landscape visited Grand Cayman last week.

AT&T Wireless representatives along with their local partners. (l-r) Mr. Jordan Roderick, AT&T President International; Mr. John Hilfinger, AT&T Vice President Business Development International; local business partner Mr. Gene Thompson; Mr. Jim Wilson, AT&T International Finance; and local business partner Mr. Dale Crighton.

(l-r) Ms. Lucy Gaffney, Digicel Caribbean Director; Mr. Denis O'Brien, Digicel Caribbean Chairman; and local business contact Mr. Peter Schmid.

In interviews with Cayman Net News, representatives of both AT&T Wireless and Digicel shared their visions of the future of telecommunications for the Cayman Islands and presented basic arguments as to why their respective companies should receive licences to compete with Cable & Wireless following liberalisation of the industry.

Mr. Jordan Roderick, President of AT&T Wireless International and Mr. John Hilfinger, Vice President Business Development International both stressed that the first step in bringing a modern telecommunications market to Cayman is completing the liberalisation process. "I believe Cayman is the most sophisticated country in the world that doesn't have telecommunications competition," said Mr. Hilfinger, "Bringing in competition is essential for Cayman in the long run."

AT&T's pair were accompanied to the interview by Mr. Dale Crighton and Mr. Gene Thompson, part of the partnership group that will operate with AT&T here. "We are extremely impressed with how straightforward and efficient these gentlemen are," said Mr. Crighton, "They are very easy to work with."

Should they receive a licence, AT&T plans to market and change the way Cayman uses the telephone. "We will focus all of our efforts to ensure the telephone of choice in the future is the cell phone," said Mr. Roderick.

Mr. Roderick believes rapidly advancing technology will make landline telephones largely obsolete, not only for local calls, but for international calls as well. "No on will use a landline to call the United States anymore," he said.

Seamus Lynch,
CEO of Digicel

A competitive tele-communications market will also bring a variety of new products to Cayman, according to Mr. Roderick. New cellular telephones will offer features such as picture/video capabilities and PDA/telephone combinations that can receive e-mail or surf the Internet. "In several years, all cell phones will have this technology," he predicted.

Offering services that enable customers to use state-of-the-art technology is very important to certain segments of Cayman's business, according to Mr. Hilfinger. "Today's top professionals expect technology to seamlessly follow them wherever they are," he said.

Part of AT&T's plan is to make all of the newest products available and affordable here. "We don't want to give Cayman small market prices," he says, "We have entered global supply contracts that will extend our US purchasing power to the Caribbean."

They plan to extend the theory of economies of scale to the services they offer as well. "Our vision is to create a Pan-North American network that includes the United States, Canada, Mexico and the Caribbean, and have that area become a single economic space," said Mr. Hilfinger. "The idea of distance in telecommunications has gone away ­ it's all just service now."

John Hilfinger, AT&T VP Business Development Int'l

Based on AT&T's strategies, one of the biggest benefits of liberalization for the consumer will be dropping costs, said Mr. Roderick. "You can be assured that if we are granted a licence to operate here, phone costs and service prices will fall substantially," he said.

A major stumbling block facing AT&T besides obtaining a telecommunications licence is negotiating use of Cable & Wireless' MAYA 1 undersea fibre optic cable that connects the Cayman Islands with the Americas. Right now, the cost quoted to use the cable is "too high for AT&T". "We will use all of our resources to secure a low cost option," said Mr. Roderick. "You're going to have a pretty big company trying to solve this problem," added Mr. Hilfinger.

Although not yet awarded a telecommunications licence here, AT&T has already begun laying the groundwork for operations anyway. "In markets that are very important to us, we don't wait until we get a licence," said Mr. Hilfinger, "We'll take some risks to offer the new service. In this way we demonstrate our commitment to the community, plus we can provide consumer choice a lot faster."

Although neither of AT&T's representatives could venture a guess as to when the liberalisation process would allow another provider to commence operations here, Mr. Hilfinger had some words of encouragement for local residents. "Your patience will be rewarded," he said.

Digicel conducted their interview with Cayman Net News over two days. The portion with company CEO Mr. Seamus Lynch was conducted by telephone, while Digicel Caribbean Limited's Chairman Mr. Denis O'Brien met with this newspaper the following day along with Director Ms. Lucy Gaffney and local contact Mr. Peter Schmid.
Mr. Lynch also confirmed that Digicel would be pursuing comprehensive cellular service as a replacement for landlines in Cayman. He echoed AT&T's claim that landline telephones are fast becoming a thing of the past. "The fixed line market has decreased in Jamaica by 20 percent over the past three years," he said.

With regard to pricing of services, Mr. Lynch said Cayman could expect similar savings to what the company has brought to other places in which they operate. "Look at our track record in St. Lucia and St. Vincent," he said, "These places are now paying 40 percent less for both international and domestic calls," he said.

Another aspect of Digicel's track record that Mr. Lynch was proud of was the fact that they were faster to launch services than AT&T when both received licences at the same time. "We launched four weeks ahead of them in St. Vincent and five or six weeks ahead of them in St. Lucia."

Mr. Lynch doesn't think, however, that more than one new entrant will enter the telecommunications market here. "Cayman is not big enough for three operators in my opinion," he said, "It's just not viable based on the population."

Should Digicel get a licence to operate here in Cayman and have difficulty negotiating a deal to share the MAYA 1 cable owned by Cable & Wireless, Mr. Lynch said they, like AT&T, were prepared to find another alternative. For Digicel, that alternative would probably be a satellite earth station, something they have utilized in other places, including Aruba, St. Vincent, St. Lucia and, most recently, Jamaica.

In the second part of the interview with Digicel representatives, Mr. O'Brien said one of the things that should make Digicel attractive to Cayman is its concentration on a specific region. "We're not interested in becoming a global provider," he said, "but we want to be very strong in the Caribbean."

Another advantage of Digicel, according to Mr. O'Brien, is its corporate structure. "We're principal investors here," he said, "We're not some big corporation."

Mr. O'Brien said the Cayman market appeals very much to Digicel, despite its relatively small population. "We would definitely like to be here. This is a very developed island, and it's also the IT and banking hub of the Caribbean. We'd be crazy not to want to be here."

Three reasons that make Cayman attractive to Digicel according to Mr. O'Brien are the island's proximity to Jamaica, its affluent, sophisticated market and the fact that Cayman "suffers from high telecommunications prices".

On of the challenges facing Digicel in it's effort to bring advanced cellular service here is getting people to migrate from fixed lines to mobile telephones, Mr. O'Brien said. He noted that the efforts had been very successful in Jamaica. "Sixty-five percent of the market in Jamaica is cellular," he said.

When it comes to competition with Cable & Wireless, Mr. O'Brien said Digicel could do very well and used the recently started operation in St. Lucia as an example. "We had a much quicker building of our market share in St. Lucia than in Jamaica," he said, "The people of St. Lucia voted with their wallets."

Should Digicel land a licence here, Mr. O'Brien said local retail telephone dealers could expect a lot of new business. "We always look to go through local retailers," he said.

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