Philip Paulwell

Digicel, appears to have lost its bid for one of two fibre-optic cable licences auctioned late last year by the government, but the cellular company is part of a consortium that won a separate bid for one of the licences.

Three separate groups had tendered for the two licences on offer, so it was always known that one would have been denied.

Yesterday technology minister Philip Paulwell all but confirmed that Digicel's was the tender that had failed to secure the licence.

"FibraLink was endorsed," said Paulwell, adding that the model tendered by another company - TCC - "was beneficial".

FibraLink is a joint venture between Jamaican-based Merit Communications and Bahamas-based Caribbean Crossing. The other bidder is TransCaribbean Cable Company (TCC) a consortium of 30 companies including Digicel.

Paulwell declined to say outright that Digicel had lost the bid, apparently awaiting to make a formal announcement at a press conference. He did say, however, that he "would not deny that Digicel did not get it".

A Digicel spokesperson declined yesterday to comment on the latest reports, telling the Business Observer that "it would not be appropriate to comment at this time", and that "I think that any response should come from the minister".

The other applicants also declined to comment, referring the Observer to the technology minister.

The licence has far-reaching implications for the price that the average Jamaican will have to pay in the long run for Internet services.

At present only Cable and Wireless has such a connection and the monopoly control is being blamed for the high price of Internet connection in Jamaica.

Digicel in its plan said it would run the underwater cable from Jamaica through Dominican Republic and then connecting with another existing cable into the United States.

The company had projected to spend US$33 million over three years and US$45 million over 15 years to sustain the cable.

Although Digicel applied in one bid that would have made it the exclusive holder of the cable, it was also part of the TCC bid as a safety. However, that bid will reduce Digicel's control of the cable and its ability to set rates, as it would be one of 30 telecommunication firms sharing space for resale.

Paulwell said that the choice for successful applicants was done in a way to make "all parties come out as winners". And also "to allow both wholesalers and retailers to benefit".

The government argues that more fibre lines will increase competition, and thus drive down prices. Currently, most telecom firms carry their Internet and data traffic on the single line, which is controlled by Cable & Wireless Jamaica.

"The move represented the most important development to the telecommunication industry since the liberalisation of the telecommunication industry in 1999," said the minister.

The other bidder, TCC promised that Internet rates could be cut by up to 90 per cent to Internet service providers which in turn would lower rates to consumers. This company said it could offer lower rates because no one telecommunication company would own the cable.

TCC promises an initial 10 gigabit per second of capacity, 75 per cent of which will be held for resale by the 30 telecoms. There cable will cost some US$32 million.

Under the TCC plan, the cable will be laid down from Jamaica to Dominican Republic to Puerto Rico and into Miami, USA.

FibraLink in its bid plans to build the most expensive cable of the three applicants - at US$45 million, running from Jamaica to The Bahamas into Florida.

Executive Class

Gardens with Gravel

Death to the Mullet!