Oceanic's chairman, Al Gencorella (in this file photo) commissioning one of the company's transmission towers.

Oceanic Digital, which paid U$45 million (J$2.7 billion) for its licence to provide cellular service in Jamaica, has accused the government of handing an American competitor an unfair entry into the local market by charging it only $300 million for its licence.

"I think it's unfair for them to come into the island and not have the same social responsibility for covering the island and the same price to access the licences we have," charged Craig McBurnett, chief executive officer of Oceanic.

McBurnett's reference was to the American telephone firm, AT&T Wireless which the Jamaican government has awarded a cellular licence, reportedly for some US$5 million - a fraction of what Oceanic and the Irish investors Digicel paid five years ago for entry into the local market.

But last week Dr Jean Dixon, the permanent secretary in the Ministry of Commerce, Science and Technology, which handles the licensing for cellular services, told the Business Observer that the deal with AT&T was not yet fully settled.

Jean Dixon

"I do expect that very shortly details will be made available but things have not been completely finalised," said Dixon. "Conditions of the licence and all of that are being worked on."

Technology minister Phillip Paulwell, who negotiated the contract, and has acknowledged that the price negotiated was $300 million, is expected to flesh out the details next week.

However the core strategy that AT&T appears to be contemplating for its entry into the local market, is to provide roaming services to Americans who visit Jamaica. Over 70 per cent of Jamaica's over 1.2 million annual stop-over tourists are from the USA, in addition to nearly a million others who visit the ports each year on cruise ships.

It is not clear if AT&T will be required under the agreement being fashioned with Paulwell, to invest billions of dollars in building out an islandwide infrastructure, as apparently was part of the condition in the licence granted to both Oceanic and Digicel.

However the Oceanic boss appeared to be concerned that in addition to the low entry price, there was no similar capital expenditure requirement for the latest entrant to the market.

"What concerns me is, they're coming in the island at a drastically reduced rate compared to what we paid and the other competitors have paid for our licence to participate in Jamaica," complained McBurnett last week Thursday.

McBurnett, who along with a team from Oceanic were in Ocho Rios over three days last week launching the company's new thrust along Jamaica's north coast, stressed in his interview with this newspaper that he was not against competition.

"As a competitor, I always welcome more competition because I firmly believe that always produces more benefit for the country," he said.

He cautioned however that AT&T should come into the market at the same price as the other players and should not benefit from special treatment.

Oceanic, since the launch of its MiPhone cellular service, has invested billions of dollars to lay out its infrastructure. In December for example, the company secured a US$30-million (J$1.8-b) loan from the Inter-American Development Bank (IDB) to help fund its US$85.2-million infrastructure development project.

At the end of last year the company's subscriber base was approximately 70,000, up from about half that amount a year earlier.

"We have been focused mostly on the south coast, from Kingston all the way to Black River for quite some time now," explained McBurnett. "We have made a reputation as being the best value for low cost providers and best cell-phones provider but it wasn't available to the whole island. Now this is the beginning of changing that and our new expansion into the north coast begins right here in Ocho Rios this weekend."

AT&T's entry into the Jamaican cellular market comes at a time when Cable & Wireless and Digicel control between them, a large chunk of the approximately 1.4 million cell-phone accounts in the island.

Oceanic says it expects to increase its share of the local market, based on the expansion it is now undertaken.
The sale of the licence to AT&T follows a November 2003 story in which the Observer reported that the Americans were in negotiation with the government for a 15-year renewable licence, but that they were yet to agree on a price.

At the time, Courtney Jackson, deputy director of the OUR, said government was asking US$50 million (J$2.9 billion) for the licence.

AT&T was said to be offering US$1 million and was then the only investor seeking a cellular licence to operate in Jamaica.

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