C & W's GM responds topublic's concern over blocking of Internet use to make overseascalls
Following the blocking of approximately2000 Net2Phone, EasyVoice and others providing low cost ratesto Cayman Islands residents for placing international calls, Cable& Wireless' local General Manager, Mr. Tim Adam in a pressrelease on Monday evening, 31 August outlined the Company's reasonsfor their action."
Meanwhile, another high end user of Cable & Wireless' services- Mr. James Knapp of SEGOES - writes in support of many who complainabout C & W's rates.
It is widely believed that Government will not step in to tryand negotiate with Cable and Wireless, because of the huge amountit is paid quarterly from revenues earned by Cable and Wireless.
Unlike Caribbean Utilities Company (CUC), the other exclusiveprovider of another necessary utility - electricity - which doesnot pay any royalties to the Government, but is restricted to15 percent return on their investment, Cable and Wireless continuesto reap huge profits from its Cayman operations, which is reportedto be the most profitable in its worldwide companies, on a percapita basis - and in terms of return on investment.
CUC's accounts are a matter of public record as an exclusive franchiseholder. Attempts in the past to try and get an indication of whattype of earnings C & W is making here, have been met withresistance. However, it is alleged that their profits may be inthe range of as high as 30 percent or more, after paying the GovernmentFranchise fee of "six percent of the Company's total grossrevenue in the Cayman Islands ...., or twenty percent of the Company'sprofit ... after allowing for administrative and technical supportcosts not exceeding five percent of total revenue in the CaymanIslands."A member of the Legislative Assembly, once statedthat C & W contributed $700,000 per month to the Government'scoffers. At this rate, it is clear to assume that the Company'snet income today, could be in the range of $35 - $40 million dollars,or a gross income of approximately $160 million - resulting in25 percent or more in pure profit.
The following are furtherreports on this new development in connection with Cable &Wireless:
Cable & Wireless'Statement Regarding the Company's VOIP Services in the CaymanIslands
In response to questions regarding Cable & Wireless' recente-mail message on the policy about Voice Over Internet Protocol(VOIP) services, Cable & Wireless General Manager, Mr. TimAdam said, "Cable & Wireless had to move fast to advisecustomers of this issue because we were concerned that peoplewould be spending their money on something that would be uselessto them."
Mr. Adam was referring to the sale of equipment advertised inthe local media on Friday. The use of this equipment would violatethe terms and conditions of service between Cable & Wirelessand its customers.
Mr. Adam continued, "Cable & Wireless is open to theintroduction of competition. Cable & Wireless operates insome of the most competitive markets around the world and we havebeen successful at it."
Mr. Adam says all Cable & Wireless is asking is that it begiven an opportunity to operate in a structured and well-regulatedcompetitive environment. "Allowing the use of such VOIP servicesas Net2Phone would bring in totally unregulated and unlicensedcompetition, and it would be doing so in the absence of any orderlytransition insofar as the Cayman Islands are concerned. That wouldbe detrimental to the country as a whole, and in particular toour reputation as a well-managed offshore financial centre."
He says, "given the current price structure, the regulatoryconstraints on pricing, cross-subsidies, the cost structure andother economic factors particular to our business in the CaymanIslands, we cannot sustain our ongoing drive to reduce pricesfor high quality service if there is proliferation of the useof prohibited services, such as VOIP."
Mr. Adam pointed out that Cable & Wireless, as the exclusivelicense holder in both international telephony and any form ofpacket switching including the Internet, is continually lookingat ways to reduce rates for customers:
"We will continue to work to reduce IDD rates in the CaymanIslands, and are committed to using our advanced infrastructureand our years of experience in the Cayman Islands to best serveour customers in terms of price and quality of service,"he concluded.