Now owned by the world's second richest man Carlos Slim, mobile provider MiPhone/America Movil (AMX) plans to overtake market leader Digicel in three years.

MiPhone is potentially just a month away from launching its next generation GSM 3G network ahead of Cable & Wireless in December and will be exclusively marketing the coveted new 3G Apple iPhone in Jamaica priced between US$200 and US$300, said Chief Executive Officer Alejandro Guiterrez during an interview with Caribbean Business Report yesterday.

The new CEO has been in charge since January following the acquisition of MiPhone parent company Oceanic Digital Limited for over US$70 million late last year by fellow Mexican, Carlos Slim, founder of America Movil (AMX). The Latin American telecoms giant has 159.16 million mobile subscribers within Latin America and the Caribbean and generated sales of US$28.5 billion last year.

"I hope that in the next three years we become number one," said Guiterrez, a target which he acknowledged was ambitious and would also depend on reducing termination rates between local mobile providers.

He described Jamaica as an 'under-served' and 'abused' market, criticising existing levels of customer service and technology offered by the local telecommunications sector. He expressed surprise that the mobile providers were yet to roll out a successor to 2G GSM.
"When you reach a (mobile) penetration of 90 per cent there should be a way to move prices downwards, it should be felt in the pockets of all Jamaicans, so I guess there is a lot of room for price change, there is also a lot of room for technology changes and better customer service," said Guiterrez.

He said that upon launching 3G, MiPhone will offer lower rates than Cable & Wireless and a Digicel. Digicel plans to role out WiMax as its choice of next generation mobile technology, dependent on winning government's upcoming auction of wireless spectrum. The first WiMax handsets will not be available until 2009.

"We will have competitive tariffs and our average costs will be below what currently prevails. Our challenge is to make calls between networks cheaper," he said.

Currently MiPhone users pay J$10 a minute to call each other but J$17 a minute to call mobile users on the Digicel and Cable & Wireless networks. High termination costs between networks means that many Jamaicans often carry several phones to enable them to save money by calling within rather than between networks.

Guiterrez said that interconnection rates served as a barrier to entry for any mobile provider seeking to break into the Jamaican market which Digicel dominates with 1.9 million subscribers, followed by Cable & Wireless with 660,000 and MiPhone with 250,000 - a total of mobile subscriptions that exceeds the national population of 2.7 million.

MiPhone has reached an agreement to lower termination rates with Cable & Wireless but not yet with Digicel.

He downplayed speculation that AMX was entering the Jamaican market in direct response to Digicel encroaching into Latin America with the two companies now competing in El Salvador, Honduras and Panama. Asked about markets elsewhere in the Caribbean, where Digicel now has a presence, he said that AMX would continue to explore potential business in the region.

"I would say that we are looking into potential opportunities both here and the wider Caribbean. We also acquired a licence in Panama."
Turning to MiPhone's imminent launch he said that AMX hoped to make a similar impact to that of Digicel which is credited with pioneering modern marketing in Jamaica when it entered the market in 2001, reaching 100,000 subscribers in 100 days. The entry of the Irish company into the local market was made possible by the phased liberalisation of the telecommunications sector agreed between Government and then monopoly provider Cable & Wireless in 1999.

MiPhone is near to completing its expansion of cell sites to a planned total of 600, part of an initial one-year investment of over US$250 million that began in November; and included the purchase of Oceanic Digital.

Guiterrez also declared that MiPhone would have sufficient stock of iPhone handsets, should demand be similar to that in other countries including Mexico.

"We launched the iPhone there only on July 11. From what I have read people were waiting outside the stores to buy them - they slept out there to be the first ones to get it. It's a big hit wherever you can get it."

MiPhone also promises several exclusive 3G-enabled handsets from manufacturers including Samsung and Sony Ericsson. Meanwhile MiPhone's existing CDMA network will continue to operate.

The failure of CDMA to gain a larger market share in Jamaica since launching just six months after Digicel in 2001 was unfortunate given its technological superiority to GSM said Guiterrez - a situation he compared to the success of VHS video cassettes over rival Betamax technology in the 1980's.

He reasoned that such an outcome was perhaps inevitable given that GSM phones allowed customers the convenience of using different SIM cards in their handsets while CDMA handsets - the type supplied to existing MiPhone customers, does not.

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