For over a year now my articles on the telecoms market in Jamaica have reflected a position which was congratulatory to Digicel for its mighty rise to the top of the mobile phone market but which also recognised that stipulations in the law gave Digicel, as a monopoly, an unfair advantage in setting termination rates and putting a chokehold on the only other viable player, LIME.

Where at least one PNP minister has complained that it is lack of refinement of bills brought to the House by the last JLP administration that has hampered his ministry in passing new legislation since the PNP won in December 2011, Minister Paulwell has forged ahead with what was there before, done his refinements and this week, had a new and improved Telecoms Act sanctioned by Parliament and well on its way to becoming a part of the ICT policy and law.

Whether or not he was guided by the past, this time around the minister practised “open government”, at all times making his position known to the public: The portability of telephone numbers across networks, and giving new power to the Office of Utilities Regulation (OUR) to set rates when there is a significant difference between rates.

The new Act essentially takes away the power of Digicel to set rates for calls terminating on LIME phones which discourages the use of the LIME network. Both players will now compete on price, customer service and a huge array of innovation. After the new regulations come into play, the best we can say is, let the games begin.

Digicel customers are extremely faithful, but in addition that company knew that its seat as a monopoly was secure just as long as it had the power to set rates which cemented LIME below them. This time around, a Digicel phone holder will be able to use the same number on the LIME network with a LIME phone if he switches, and if a LIME phone holder is dissatisfied with the service, she can switch to Digicel and use the same LIME number.

I expect to see rates dip to $4 per minute and even less for post-paid customers. Digicel and LIME can now disband their lobbies to the government and get to work in grabbing customers and holding them. Technology in the telecoms industry increases exponentially, and the management of both companies had better be aware that what is in vogue today will be archaic next year.

No greater is there an example of that than with BlackBerry. In Canada, home of Research in Motion, the makers of BlackBerry, the iPhone has moved to the top in terms of ownership and use of smart-phones. In the USA, the same slippage is showing. In Jamaica, where the use of BB messenger and just the snob-possession of a BlackBerry still make the phone a hit, any comparison of a BB with an iPhone will immediately place the BlackBerry in an uncomfortable second place. I am getting ready to park my BBerry.

LIME and Digicel will now be forced to roll out new and improved offerings in terms of service and attractive and usable products. The gate is now open to a common cross-network charge. People using their mobiles will no longer have to ask each other if their friend’s or relative’s number is LIME or Digicel. They will just call because the cross-network charge will be the same.

If one network wants to drop its in-network charge to $3 per minute, what is the response that is likely to come from the other network? Innovation, added aggressiveness in marketing, regularity in new product offering, impeccable customer service. An even lower rate?

Congrats, Minister Paulwell. In a nation with one of the highest mobile penetration rates, the people will love you for a long time.

Eating Chinese food

In response to an article I had written criticising the contractor general in relation to China Harbour’s US$600 investment in the North-South toll road, in February, the OCG wrote, among other things, “While, however, Mr Wignall is entitled to his opinions, however flawed they might be, I, on the other hand, as Jamaica’s contractor general, enjoy no such luxury, for I am mandated by the Contractor General Act to ensure that the subject road construction and toll-road concession opportunity is awarded impartially and on merit and in circumstances that do not involve impropriety or irregularity.

“Obviously, I cannot, and neither can the Government, in the present circumstances, and particularly in light of the unique knowledge that the OCG has about the proposed transaction, give any such assurance to the people and taxpayers of Jamaica.”

It was then my view, and still is, that with China Harbour investing US$600 million and hoping to recoup the investment by collecting a toll for 50 years, the inclusion of a huge probe by the contractor general was essentially overkill.

It now turns out that “the unique knowledge” that the OCG wrote of was that the project was unviable (to the Chinese), meaning that, by the best estimates by reputable independent firms, there is no way that the Chinese firm (read China) would be able to recover its investment. It would suffer horrible losses.

Let us assume that the contractor general’s findings are spot on, why can he not see the deal for what it is increasingly appearing to be? One outside of mere monetary investment and more in the line of expanding the geopolitical reaches of the Chinese.

In other words, how much is China willing to lose (to spend) on the North-South highway deal and other such projects to secure influence and geopolitical space in economically broke countries like Jamaica and the larger Caribbean and Latin America?

Certainly, the Chinese are no fools. A choice few of the technocrats in the respective Government of Jamaica ministries would also have known of the politics behind the deal, our economic dilemma, the benefit Jamaica was about to receive and the willingness of the Chinese to script and sanction the overall arrangement.

This places the OCG in a “cute” position. He is a lawyer and rigidly so. He is damn good at what he does, but he now finds that his knowledge of business viability and openness in the procurement process is not what is called for in the present North-South highway link.

This is geopolitics and it is bigger than his office!

observemark@gmail.com