Cellular provider, Digicel Jamaica, says that by March it will have the capacity, and technology to provide fierce competition to Cable & Wireless in international calls, a development which the company believes could force down prices by as much as 25 per cent.

The company has invested some US$12 million in a satellite earth station and switching capacity, to create a link with the outside world that is independent of Cable & Wireless. At the same time, it has initiated discussions with several international carriers including WorldCom, AT&T, and British Telecom - the latter, C&W's more powerful competitor in the UK market.

"We will reduce international calls by at least 20-25 per cent," Seymus Lynch, Digicel's chief operating officer told the Business Observer yesterday. "As of March we will not have to route our international calls through C&W."

March 2002 is when the monopoly that Cable & Wireless now enjoys in fixed lines and international telephony comes to an end. Its monopoly in the cellular end of the market was terminated in 1999 when the government auctioned two cellular licences - one to Digicel and the other to Centennial, at a combined cost of nearly US$100 million. At the same time, the government negotiated a March 2002 deadline with C&W for the opening up of the land based and international markets.

Lynch told the Business Observer yesterday that his company would introduce a series of innovations to win customers, and would invite other telephone providers in the market - like Gotel, Centennial and marketers of international calling cards - to utilise the Digicel infrastructure for their service.

"We have put in the facility so that any entrepreneur who wants to buy capacity to sell international calls can do so without having to make a big investment," explained Lynch. "We have sufficient capacity to cater for the market."

Until March next year, both Digicel and Centennial as well as providers of international calling cards, are required to route their calls through C&W.

Lynch said that under the present financial arrangement, Digicel "just breaks even" on international calls, because of the fees it has to pay C&W for routing international calls either made or received by its customers, through its network.

At present, calls to the USA range from about $22 per minute to about $27 per minute.

But Digicel says it plans to introduce innovations like bulk minutes to corporate customers to woo them away from the competition.

"We will be very innovative in our approach," Lynch said. "There will be volume discounts for corporate entities. Hopefully the customers will benefit from the offer of greater savings."

Already, Digicel's entry into the Jamaican market has had a major impact on the revenue and profitability of Cable & Wireless, with the once monopoly provider having to make significant net pay out to its younger rival for call termination charges. For the quarter to June 30, this year, C&W paid $1.24 billion for termination charges to various telephone providers including Digicel - up from $500 million the comparative period last year.

Yesterday, Lynch though declining to discuss precise details, acknowledged that there was a significant net positive payment from C&W to Digicel, but argued that it was expected, given the number of landlines that C&W had. C&W has combined over 1 million landlines and cellular customers, twice Digicel's customer base.

Lynch told the Business Observer that in addition to its earth station located near Caymanas Polo Club in St Catherine, Digicel was investing some $50 million in improving its capacity and installing another 90 cells cites to eliminate all the blind spots in the network.

"We are about to spend another $50 million for another 90 cites and more capacity in the network to keep up with customer growth and full coverage. We are now close enough to full coverage , so we just want to cover the blank spots."

Lynch said that NCB and RBTT had been the main bankers that had been funding the expansion of the network.

"We and NCB have a very god relationship, also RBTT," he noted. "The local banks have been good funding partners."

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