News from Our Region
Cable and Wireless and Digicel fighting for Caribbean market share
THE war for entry in mobile services in the Eastern Caribbean, involving Cable & Wireless (C&W) and its biggest Jamaican rival Digicel, continued last week with each company blaming the other for delaying the competition in St. Lucia and St. Vincent.
According to the Jamaica Gleaner,Digicel Jamaica's chief operating officer, Seamus Lynch, had accused C&W of not moving fast enough to grant them interconnectivity so they could launch their mobile service in those islands, where they have been granted licences to operate.
C&W's general manager in St. Lucia, Rudy Gurley, shot back, blaming Digicel for the delay, saying it should have considered "the inevitable delay when it decided not to accept a licence initially offered in April, on the same terms and conditions accepted by C&W."
But Mr. Lynch countered: "If Cable & Wireless wants to sign an agreement today they can do so, but they are not signing because they don't want competition."
In response to an advertising campaign in St. Lucia, which Digicel has been using to coax would-be cellular customers not to buy cellular instruments until there was competition, Mr. Gurley suggested it was probably a fast-track strategy designed to influence the public and other stakeholders to pressure C&W to grant interconnection before the Christmas rush.
In the reaction, channelled through C&W Jamaica, Mr. Gurley said Digicel, having declined the permit in April, did not receive a revised licence until September, with some four months being lost in the process of negotiating for an interconnection agreement.
In urging Digicel to return to the negotiating table, Mr. Gurley referred to "an interesting development emanating from Jamaica," which, he said, "is not irrelevant to the current scenario in St Lucia." He said "this sheds a bright light on Digicel's approach to agreements they have signed; their attitude towards allowing the regulatory authorities to exercise their duties under law; and indeed their view on the prices imposed on fixed line customers for calling customers on their network."
Although Mr. Gurley did not elaborate, he was apparently referring to a suit brought by Digicel Jamaica in the Jamaican Supreme Court, seeking to prevent the Office of Utilities Regulation (OUR) from reducing the rates it currently charges for calls made from the fixed network to Digicel's mobile.
The OUR has determined that the rates must be reduced by about a third in line with a reduction in international benchmarks. However, Digicel Jamaica has argued that in a competitive environment the rates should be determined by the market.
Mr. Lynch said it was "absolutely not" true that Digicel should be faulted for the delay in reaching an interconnect agreement because it was only granted the requisite licence in September.
"The fact is they are stalling, they are blocking the interconnection agreement," said Mr. Lynch.
According to the Gleaner, the Digicel chief operating officer pointed out that while C&W was reporting record losses in its international operations, the United Kingdom-based company also reported that its regional business, primarily the Caribbean's, generated half the revenue for the group, and all of the profit. C&W was therefore doing all it could to try and maintain its monopoly position in the Eastern Caribbean for as long as possible, Mr. Lynch said. "They are trying to ring-fence that," he said.
He said C&W was made aware at the time Digicel was granted the licence and expected that within a short time thereafter they would have been interconnected, but "there's nothing in terms of progress."
Digicel has been trying to get C&W to grant an interconnection agreement along the lines of the Jamaican model adopted when the Irish-based company entered the local market last year, but C&W has declined to entertain such a suggestion. "It's the same region so it's totally illogical for them not to want to sign a similar agreement," said Mr. Lynch. "Rather, they are looking for different elements in that agreement" being sought in St. Lucia and St. Vincent. Furthermore, Mr. Lynch said, "not everything in the Jamaican agreement is good for Digicel, and therefore we can make a compromise in a new agreement, just as we did with the Jamaican agreement."