T&T on the verge of full telecommunications competition
(cellular and international), the Business Guardian starts a
forum on this sector which is so important for this countrys
The first contribution comes from Marlon Morris, a former
national footballer who is a telecom professional currently
employed with majority State-owned TSTT.
This is a forumit is meant to be an exchange of ideasand
it is hoped that companies who are interested in participating
in T&Ts telecom future would contribute to it as
they see fit.
We also expect participation of the representative trade union,
the Telecommunications Authority, Canto, academics and, most
importantly, the customers. Business Editor
The telecommunications market of T&T is a multi-billion
dollar sector with the potential to offer reasonable returns
on investment for new entrants.
While the mobile market is considered the most lucrative,
there are other segments such as international voice and data
services, as well as local voice services that are also considered
The sector is rife with competitive expectancy since, and
based on the Telecommunications Authority (Tatt) pronouncements,
the market should have two new mobile operators and several
other providers of international telecommunication services
before the end of year.
What does this
mean for T&T?
If the Tatt is successful in establishing a well deregulated
market then this market should be characterised by interconnection
and wholesale rates that result in acceptable margins for
all providers, including the incumbent, TSTT; increased innovation;
industry growth; additional employment; and of course lower
rates, particularly in international voice.
Evidence of this can be observed from the experiences of our
Caribbean neighbours such as Barbados and Jamaica.
A McKenzie Quarterly article showed that for eight European
countries that experienced deregulation, international voice
rates declined, on average, by 50 per cent within the first
year of competition. In Jamaicas case, international
outgoing voice rates declined by 66 per cent.
One can also assume that the Tatt will want its policies to
lead to the attainment of the goals of the Governments
2020 Vision as outlined in its Fast-Forward plan, such as
greater broadband penetration, higher tele-density, increased
mobile coverage, and continuous technological innovation particularly
within the mobile arena.
The Tatt has received 11 applications from facilities-based
providers, that is, companies that intend to build their own
Of the 11, I consider the Cable Company (CCTT) as being ideally
positioned to gain significant market share.
CCTT already has 90,000 plus customers and a pervasive network
Their fibre/coax hybrid network can enable the triple play
servicescable TV, voice and broadband Internet services,
and even other compelling plays such as security/video surveillance
Some of the fixed wireless providers (for example Lisa Communications)
currently use VSAT (via satellite) technology to facilitate
the offering of their Internet service plays.
Such providers would be considering the establishment of their
own international link, either as part of a consortia or a
leasing agreement with an existing international provider.
This will allow them too capitalise on the origination and
termination of both data and voice traffic.
Many operators will be eyeing the termination market, particularly
the current bypass market ie traffic terminating in T&T
but bypassing the incumbents network.
Emerging roles and opportunities
A full blown competitive market would also create opportunities
for those in the telecommunication support and ancillary services.
Telecommunication consultants and advisory service outfits
that offer research, advisory, project management, and brokering
services; telecommunication agents will be re-selling services
for existing providers; emergence of private pay phone providers
as well as more Internet cafes.
We do however anticipate a shakeout among international call
centres because of the expected substitution effect that is
expected from pre-paid cards and other IP enabled devices
that can be used from the comfort of someones home or
The international calling centres may not survive as a stand-alone
model, expect for those in high traffic strategic locations.
In order for this business model to survive they will have
to broaden their service offering. There will also be opportunities
within the legal space for lobbying and association type services.
Currently, there are over 100 international call centres and
Internet cafes, several unlicensed pre-paid card providers
and other players offering international voice services throughout
T&T, of which 105 have actually applied for concessions
to offer such services.
Should these licenses be granted, the market would experience
a myriad of new devices and voice enablers, such as, Analog
Adaptors, IP phones and Voice over Internet Protocol (VOIP)
service via personal computers (PCs) enabled via either dial
up or broadband connections.
On the mobile side, consumers will benefit from the new services
such as m-Commerce (eg mobile banking), location based services
security and surveillance, mobile videoconferencing, and mobile
gaming that are enabled by the deployment of GSM and CDMA
3G technology such as EDGE and EVDO, R4 (mobile IP), and UMTS
(which enables broadband mobile Internet access).
I strongly believe that once the market is properly regulated,
T&T will witness an expanded and larger telecommunications
sector that will be a net add to the GDP and employment roles.
A sector that is well managed with interconnection agreements
between the players that leads to reasonable win-win profit
margins, that is looked favourably upon by the financial markets,
and where new entrants as well as existing providers will
continue to invest in new and emerging technology and services.
Some experts have asked whether or not the current dispute
between Digicel and C&W can delay the interconnection
My take on this is that it would not significantly affect
this exercise. In my opinion, the most important predictor
is the effective and skilful role of the Tatt in its policy
making and adjudicator role.
who, whats what?
Of the five mobile applicants, I would consider the three
front-runners to be Digicel, Cingular and Laqtel.
Digicel, which prides itself on being a monopoly buster, is
the second largest mobile operator in the English-speaking
Caribbean and has already begun to lease sites and establish
distribution and supplier relationships within T&T. Moreover,
it recently secured over $US400 million in additional funding
which places it in a strong bidding position in
the proposed T&T auction.
However, they are definitely doing themselves a disservice
on the public relations front. I was a bit surprised at their
decision not to try and influence the WICB to still select
the seven players who had personal contracts with Cable &
Wireless, especially in light of their public relations troubles
in other regional countries.
They are before the courts in Guyana responding to allegations
which the Irish company has described as baseless, spurious
Even if Digicel is successful at obtaining a mobile license
in this country, they will have to expend significant resources
restoring their image.
And I am sure that their job will not be made any easier by
the competition, which will remind the public (covertly or
overtly) of Digicels treatment or lack thereof
of the West Indies seven, particularly the three local heroesBrian
Lara, Dwayne Bravo and Ravi Rampaul.
While Laqtel may not have the financial war chest as Digicel,
it has a strong telecommunications partner in Sasktel of Canada,
and respected local management and leadership talent.
While much has been made of the fact that several of their
members have a close association with the ruling PNM Government
(including their late chairman Anthony Jacelon), Laqtels
leadership has always downplayed that dynamic and instead
has focused on the salient business and technology issues.
Being a local applicant should also be considered a plus especially
with an administration that is championing greater local involvement
in the commanding heights of the economy. Laqtel
is also doing some excellent public relations of its own.
A couple weeks ago, one of their technology experts, Scott
Maciahs, was a guest on the Gladiators Sunday morning
Talk Show. He highlighted the benefits of their chosen mobile
technologyCDMA. He rightly identified the efficiencies
of CDMA mobile technology over GSM when he noted that AT&T/Cingular
and Digicel would need about twice the level of spectrum compared
to a CDMA provider.
Moreover, in the interest of technology diversity and innovation,
it would be more prudent for the country to have one of the
three providers with CDMA technology instead of all providing
GSM service. If we are serious about being a telecommunication
hub of sorts then having CDMA as well as GSM will definitely
be a big plus.
Even though Cingular may not consider the Caribbean as strategic
since its recent acquisition of AT&T Wireless, my sense
is that they would still seriously bid for one of the licenses.
This market is the largest and fastest growing in the Caribbean,
one of the proposed venues of the Free Trade Area of Americas,
and is of significant national security importance to the
United States given this countrys position as a major
exporter of natural gas to that country.
Cingular is also cash rich, and as they have shown in Barbados,
where they were initially denied a license in favour of Digicel
and Sunbeach, they arent afraid to use the moral
suasion skills of the relevant United States agencies
to get a licence.
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