Digicel has paid US$15.7 million to the Trinidadian government for a licence to operate a cellular network in the twin- island republic, with plans on the drawing board to invest another US$100 million to lay out the communications infrastructure on the island.

Yesterday's decision by the Telecommunications Authority of T&T (TATT) to recommend to Cabinet the granting of two new licences, including the one to Digicel, has paved the way for this company's presence in all the major markets of the Caribbean.

Digicel, which was one of five companies that competed for the two licences, secured five blocks of spectrum, each totalling five MHZ of frequency. Trinidadian sources estimate that the firm will need to spend another US$100 million to establish its cellular network.

Though the final decision will be made by the Ministry of Public Administration and Information, in conjunction with Cabinet, T&T sources say that this will be a mere formality, given the recommendation of the regulatory body.

The Irish company which in 2001 established a beachhead in Jamaica from which it has systematically launched a foray in the markets of the region, has been building a cash mountain for precisely the kind of expansion announced yesterday.

Earlier this year, Citicorp in New York syndicated a US$408-million capital development note for the telecom provider - cash which evidently would have also come in handy in the company's recent expansion into Haiti, and its even more recent moves to acquire Cingular's Caribbean businesses.

In yesterday's formal announcement of the licence, Digicel's chairman and principal shareholder, Denis O'Brien said his company would replicate in the twin-island market, the business and marketing template that had made it a success throughout the region.

"Digicel will commence a rapid roll out of its service that will give Trinidadians and Tobagonians the opportunity of choosing a service provider that will offer superior customer care, better value for money and wider coverage," said O'Brien.

Digicel's operation in Trinidad and Tobago is via partnership with international and local investors that include the HCL Group, and Zenith Diversified Holdings Limited.

Trinidad represents the final significant market in the region for Digicel. The market went into play in November last year, when the government publicly sought bids for two new cellular licences. Five companies tendered: NatTel, Digicel, Telkom Caribe, Laqtel and Cingular Wireless.

Laqtel was the other winner.

The bidding process was the final move by the Trinidadian authorities to bring competition to a monopoly market in which the government itself was a major beneficiary, having for nearly two decades, shared a 51/49 per cent partnership with Cable & Wireless the sole telecoms operator on the island.

Like most of the other islands in which C&W operates, the monopoly in T&T was granted by fiat - a 1989 accord between the government and C&W for the 51/49 split in the ownership.

About a year after the Jamaican government began through legislation, to de-monopolise the industry, the T&T government took its own first tentative steps towards putting in place the legislative framework for competition - through the Telecommunication Act of 2001.

In entering T&T, Digicel faces a slightly different challenge than in Jamaica when for about a year, it was the only competitor to C&W, with Centennial, which had won a licence at the same time as Digicel, having delayed its entry to the Jamaican market.

In T&T however, Digicel faces the simultaneous entry of the other licensee, as well as an aggressive pre-emptive strike by the current monopoly which is now spending millions to upgrade and expand its GSM infrastructure.

Ahead of the entry of competition, TSTT announced an agreement with Nortel to spend an estimated US$50 million over the next two years to expand and upgrade its GSM/GPRS wireless network, deploying both core and access equipment, including base stations and switching.

With Trinidad slated to join its market, Digicel's Pan-Caribbean operations extends to Aruba, Barbados, The Cayman Islands, Curacao, Grenada, Jamaica, St Vincent & the Grenadines, St Lucia. Additionally, it entered Haiti recently and with the agreement with Cingular Wireless that was announced on Wednesday, will have a stake in Bermuda, Anguilla, St Kitts and Nevis, Antigua and Barbuda, and Dominica.

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