By Robert F. Evans P.E., Contributor
DIGICEL'S LAUNCHING six months ago signalled a new era in utility service in Jamaica. For the first time we had genuine competition and Jamaican's response to the new service was to take out 100,000 of their phones in just under four months. The announcement of this landmark event was accompanied by the news that C&WJ had 500,000 subscribers.
Now, fanfare aside, the fact is that during this first period of competition C&WJ may have sold almost as many phones as Digicel. When Digicel came on stream in April 2001, C&WJ had about 450,000 phones in service and, if it is true that many of their customer's switched, then C&WJ sold over 50,000 phones in that same period!
To me, these results are very surprising. It is a matter of public record that the service provided by C&WJ deteriorated to the point where the Office of Utilities Regulation was forced to take action. Their cellular system broke down on many occasions while, in contrast, Digicel's service remained without doubt far more reliable despite one prolonged black-out that I know of. So why did so many people turn to C&WJ?
Alzheimer's disease
I would rule out loyalty as being any element of the explanation because it was a common perception that C&WJ lacked finesse in their customer relations area and were considered to be overpricing their product as evidenced by their suddenly smiling faces, price reductions and new products when faced with competition. The belief that the company, acting as a monopoly, was overcharging could only engender loyalty if the customer was afflicted with chronic Alzheimer's disease.
Earlier in the period, it was thought that C&WJ customers were just waiting out their deposits before switching but the effluxion of time has made nonsense of this theory. In hindsight, though, it would have been good sense to take this approach because, in my experience, getting that refund was like pulling teeth.
Later it was posited that many did not switch because their friends or contacts still had C&WJ phones and the rate to Digicel was too high. If this is true then it appears to represent a marketing faux pas by Digicel because it has been said that it was they who set this rate.
In an earlier article I offered my analysis of the prices existing at the time and proved that the per-second billing would offer significant savings over the per-minute system. I pointed out the rather obtuse corollary that C&WJ profited by mixing this system of charge with bad service and may have made millions of dollars in profit by this situation. Reason it through.
Users of C&WJ's system experienced numerous call failures and, cut off in mid-sentence, often had to place another call. If there was no compensation for the dropped call then the customer would pay for both calls. If the first call lasted say, 2 minutes the charge would be three minutes and if the second call lasted 20-seconds the charge would be another minute.
Thus the caller would have paid four minutes for three minutes usage and C&WJ would have profited by one minute's revenue. How often do you think this happened during the months and months of bad service with between 300,000 and 450,000 phones in service? Add to the equation the time you paid for by the minute by saying "Can you hear me"; "You are breaking up!" and the like. I have not seen what I would consider any genuine attempt to repay all of this windfall money.
There may be some perception that Digicel is more expensive but, believe me, there is a very significant difference when you take per-second billing into account. In my own experience, for example, I made 355 calls in my last three months with C&WJ and this worked out to $17.12 per call. In my first three months with Digicel's 'digiselect 80' package I made 388 calls at an average rate of $10.83 per call - a savings of about 58 per cent.
Of course C&WJ have since lowered their prices and the gap may not be so wide at today's prices but this brings up that nagging question - were we being held to ransom and overcharged in the past? I did not study the effect on fixed line bills but noted that about 27 per cent of my calls were to fixed lines.
As a basis for a somewhat independent comparison I researched cellular pricing in Miami. All the systems (cingular, verizon, voicestream etc.) operate on the basis of charging by the minute as well as for incoming calls. Charges for exceeding the bundle of minutes are penal.
They sometimes offer free calls within a system or unlimited calls in off-peak periods. My conclusion is that, depending on calling habits, cellular service may be cheaper in Jamaica than in Miami and, for that, we can be thankful to both providers.
My earlier published analysis on cellular prices showed that "reddiecellie" appeared to be the least expensive cellular option and, if this is the main area of growth for C&WJ, then perhaps their growth figures make some sense. There is also the fact that some Jamaicans obtained their phones from America where it may be easier at this time to get C&WJ compatible instruments.
Continued success
Whatever the reason for C&WJ's continued success, Digicel must by now have realised that the market was there for the taking. C&WJ have withstood the first punch and it appears that their service has now improved somewhat.
At this time, though, there is probably little that both providers can do because prudent management would dictate that they keep something up their sleeve to counteract the launching of Centennial later this year.
Who knows? This may prompt C&WJ to offer per-second billing and stimulate both providers to reduce the horrendous costs associated with roaming. Right now, though, I am ambivalent regarding whether it is C&WJ or Digicel that should be congratulated.
I confess that it was my assessment that the public's response to Digicel would have been far greater. I believed that the commonly held perception of bad customer service, bad products and general classic monopolistic behaviour would have paid a negative dividend to C&WJ and sent a strong message to other monopoly entities. But, maybe I'm wrong - so far.
If I were allowed a rather generous poetic license I would sum up my position with an amalgam of two popular quotations: "the fault, dear friends, Jamaicans countrymen, lies not in our various service providers, but in ourselves as unenlightened consumers."
