The telecoms executives appear pleased just prior to yesterday's announcement of a $5-billion deal for the development of C&W's Caribbean network. From left: Errald Miller, CEO for C&W's regional operation; Gary Donahu, president of Nortel Network for the Americas; and Gary Barrow, president, C&W Jamaica.

Cable & Wireless West Indies (C&WWI) yesterday signed a US$104-million (J$5.1-billion) agreement for the Canadian telecoms firm, Nortel Networks, to install a GSM network -- with added technological bells and whistles -- which it says will not only enhance its mobile communications capacity in the Caribbean but place it on the cutting edge of the next generation of mobile technology.

Errald Miller, the president of the C&WWI, said that the network would include General Packet Radio Service (GPRS), the growing technology for mobile data delivery as well as EDGE (Enhanced Data GSM Evolution), providing C&W's Caribbean customer base with a
leg up on third generation mobile technology.
The new system will run seamlessly alongside C&W's existing TDMA mobile phone technology in the Caribbean, which, although still widely used in the Americas, has emerged as the clear leader for the next generation of cellular technology.

With its new system, which Miller first spoke of at a technology show in Kingston in August, Cable & Wireless will be able to offer its customers what Miller called "the best three worlds" -- GSMA, TDMA and data delivery through GPRS. Customers will have data speed of up to 384 kilobits.

"The network will be rolled out on a phased basis across the Caribbean countries currently enjoying mobile services provided by Cable & Wireless, beginning with Jamaica, Cayman Islands and Barbados in April 2003," said Miller, who headed C&W Jamaica until he was promoted nearly two years ago to head up the new regional company to pull all C&W's Caribbean subsidiaries under a coherent umbrella.

"In integrating its GSM network with its existing TDMA networks, Cable & Wireless is employing a strategy similar to that used by companies such as AT&T and Cingular in the USA; Rogers in Canada; Ente Movil in Bolivia; Telcel in Mexico; and Telecome Personal in Argentina," Miller added.

Over 60 per cent of the investment -- J$2.95 billion -- will be on building out of the GSM/GPRS network in Jamaica where C&W is busily attempting to transform itself into an aggressive, technologically-driven telephony and data transmission company. Miller said that a chunk of this investment was in addition to its annual J$4 billion to $5 billion in capital development that C&W spent on capital projects in Jamaica.

C&W Jamaica, which is listed on the Jamaica Stock Exchange, posted net profit of $728 million for the second quarter to June 30, 2002, 11 per cent below the corresponding quarter last year.

But its profit position is likely to fall under pressure in the face of domestic competition and American demands for sharp reductions in the settlement rates for international telephone, which brought C&W substantial profits, some of which it used to subsidise its domestic telephone service. The company has been aggressively rebalancing rates in recent years, including this months average 25 per cent reduction in the cost of international calls and hikes of up to 66 per cent on domestic ones.

C&W previously had a 50-year monopoly on Jamaica's telecoms market, but negotiated a three-year transition to liberalisation, which ends next March, when competitors will be allowed to by-pass its network for international calls.

It already has competition in mobile telephones from the Irish-owned Digicel, which launched its service 17 months ago, and from the US-owned Centennial. Digicel, which operates on the GSM system, and C&W have between them about one million mobile telephone subscribers in Jamaica.

Cable & Wireless will also soon face competition in its fixed line telephone business in Jamaica from a company that is already establishing a network for a wireless fixed phone service.

Despite some past reservations about the approach to the opening of the market while head of Cable & Wireless Jamaica, Miller stressed that he was never philosophically against competition.

"I have never had a problem with competition," he said yesterday. "...We are here to compete."

The UK-based C&W, which has operated in the Caribbean for 125 years, when it established a telegraph service in the region, already has mobile telephone competition in some eastern Caribbean territories and is now settling a Jamaica-style end to monopoly with area governments. Digicel is close to rolling out a mobile network in St Lucia.

In the Cayman Islands, too, the government will soon announce is agreement to end C&W's monopoly and Digicel is also to establish a service there, with launch expected by next year's first quarter.

In the face of the growing competition, C&W is obviously keen to expand its offerings, particularly to business customers and people on the move, despite Miller's insistence that there is no neglect of other segments of the market.

"Our corporate customers are no longer interested in merely keeping in touch through roaming, but their needs have expanded to where they would like to transact business while on the go," he said.

Much of this is still done from fixed line services. But this new network, which will allow subscribers international mobility, will also "afford our customers the ability to transact business from wherever they are using enhanced mobile services", Miller added.

"People want to want from anywhere and Cable & Wireless is giving them that," he said. "It is mobility which is the critical driver."

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