Thursday 23rd June 2005


Internet auction set for today

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Cingular Wireless, the US telecom giant shortlisted to take part in today’s spectrum auction, may not be part of the bidding process, sources said earlier this week.

AT&T Wireless, which had expressed interest in the process five years ago, was acquired by Cingular, the US telecom giant, recently. Cingular was one of the five companies shortlisted by the Telecommunications Authority in December.

After many months of delays, the auction for two cellular licences is scheduled to take place today using the Internet to receive the competitive bids.

The other companies were T&T’s Laqtel, Ireland’s Digicel, US-based NatTel and Telkom Caribe.

Mike Singh, the man behind the Telkom Caribe told the Business Guardian in an e-mail on Tuesday that Cingular “was in the process of identifying an appropriate buyer for its Caribbean assets.”

Cingular acquired AT&T Wireless for US$41 billion thereby creating the largest cell phone company in the US with 46 million customers.

Singh said the “folks at Cingular” were “keen to exit the Caribbean” as the company had “bigger fishes to fry.”

He said Cingular Wireless was keen to exit the Caribbean because its recent acquisition of AT&T Wireless was a major capital expenditure and it was now faced with the daunting task of improving customer service perception and quality on the AT&T Wireless (Blue) side of their business, which was rated the worst in the industry.

Cingular is one of five companies the Telecommunications Authority of T&T (TATT) has prequalified to participate in the country’s mobile spectrum auction.

The company is a joint venture between San Antonio-based (SBC) Communications which owns 60 per cent and Atlanta-based BellSouth which owns the remaining 40 per cent.

Singh also pointed out that Cingular was in the midst of a US$3 billion network upgrade and had awarded the bulk of its upgrade to Ericsson, German company Siemens and US-based Lucent Technologies.

He explained that SBC dispensed its assets in India and Israel while Bell South sold its overseas assets in Central America to contribute to AT&T’s Wireless acquisition costs.

“Given the scenario, it is highly improbable that Cingular will want to focus on a small, disconnected market as the Caribbean where the return on investment is minuscule compared to the investment of time and resources to run the business,” Singh said.

“An exit strategy is definitely on the card for Cingular in terms of the Caribbean but there do not seem to be too many suitors at this point in time.

“It will surprise the hell out of the entire industry if the (Cingular) did move ahead in acquiring a license in T&T given the current strategic focus of the parent group which includes paying down their debt, improving customer service, completing the integration of AT&T Wireless, increasing market share in the face of tough competition in the US from the likes of Verizon, T-Mobile, Nextel/Sprint and completing the costly UMTS upgrade to 3G,” he said.

Singh said Digicel was now eyeing Cingular’s Caribbean assets but it could end up falling into the hands of Vodafone, the world’s largest GSM provider.

Joseph Laquis, a consultant to local company Laqtel which is also shortlisted said he was aware the company would not be part of the bidding process but did not have any details.

A TSTT representative confirmed that he was aware that Cingular was looking for a buyer for its Caribbean assets but chose not to comment.

A month after Cingular acquired AT&T Wireless, it announced that it would expand operations into eight Caribbean islands next year. It said it would offer services in Curacao, St Kitts, Anguilla, Jamaica, Martinique, Guadeloupe, St Martin and St Bart’s and indicated its intention to acquire licences to operate in T&T and Turks and Caicos.

©2004-2005 Trinidad Publishing Company Limited

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