Left: More options are to open up in the cellular phone market when two new players start operations. Former Foreign Affairs and Foreign Trade Minister K.D. Knight keeps in touch during the PNP presidential campaign earlier this year. - RUDOLPH BROWN/CHIEF PHOTOGRAPHER.
Right:
Market leaders Digicel are picking up the pace. Board chairman of KONKA Telecommunications Technology Ltd. Huang Zhongtian (right) demonstrates some features of the new KONKA D163 and has the rapt attention of CEO of Digicel Jamaica, David Hall . The two were at Digicel Group's headquarters on Knutsford Boulevard on June 12, where Digicel signed a contract with that Chinese telecommunications company. - CONTRIBUTED
JAMAICA SAYS it will be selling two more cellular telephone licences, with the closing of the deal just awaiting the completion of due diligence reports commissioned by the finance ministry.
According to Phillip Paulwell, the technology minister, the licences in the 1800 and 1900 mega hertz bands, once agreed, will go to a UK firm, Wire9 Plc and a U.S. outfit, Wiiscom.
The Government expects to earn US$19 million (J$1.2 billion) for the licences, Paulwell said, suggesting that the companies are paying an average of US$9.5 million a piece for the opportunity to do business in Jamaica.
"I will announce the full details once the ministry of finance has completed the due diligence exercise," he told Parliament this week.
These two companies, if the deals are concluded, will enter an already robust mobile telephone market, with three significant players and a high level of penetration. There are about 2.1 million mobile telephone subscribers in Jamaica, a country of about 2.6 million people, suggesting a penetration rate of approximately 81 per cent.
The biggest of the mobile phone providers is the five-year-old Irish-owned firm, Digicel, which is estimated to have a little over half the subscribers, followed by Cable and Wireless Jamaica, the original player in the market, with perhaps 700,000 subscribers. Oceanic Digital (MiPhone) has about 100,000 subscribers.
VALUE-ADDED SERVICES
But, according to Jamaican officials, both Wire9, a London-based company and Wiiscom, a relatively new Calfornia-registered outfit, will seek to offer value-added telecommunications services in addition to mobile telephony.
Wire9, for instance, already offers ISP convergent services in the UK, operating voice over Internet protocol (VOIP) fixed and mobile exchanges. "They will operate on the European spectrum and seek to offer data and related services to European companies in Jamaica or companies wanting seamless telecoms links with Europe," explained an official.
Wiiscom, apart from Jamaica, is seeking to do business in Barbados and Guyana, where they have sought telecommunications operating licences. "They are looking to do value-added business," said a Jamaican official.
Since Digicel's aggressive entry into Jamaica at the start of the liberalisation of the island's telecommunications market, it has rapidly grown into one of the largest telecoms companies in the Caribbean, first challenging, and breaking, C&W's dominance in the English-speaking area.
A fourth company, America's AT&T Wireless, which was acquired by Cingular, had paid US$6 million for a mobile licence, but handed it back to the Government after Cingular's rethink of its Caribbean strategy following the merger. The old AT&T licence, which the government had again put up for auction, is one of the two that Paulwell has now hawked.
Digicel last year acquired Cingular's Caribbean businesses but the deal did not include the Jamaican licence.
The price that Wire 9 and Wiiscom will pay for their licence, compared to the over US$45 million each by Digicel and Oceanic, apparently reflects the relative maturity of the market in the five years since liberalisation.
But with the Government reporting revenues of US$751.43 (J$48.84 billion) last year among the telephone/telecommunication providers, firms apparently continue to see opportunities in Jamaica.
In fact, according to Paulwell, Digicel, Cable & Wireless and Oceanic, in the 12 months to the end of March 2005, spent US$173 million on network upgrading and are projected to have spent another US$144 million for the period up to last March.
As part of this drive for additional share of the market, Digicel recently received licences from the Spectrum Authority to offer wireless broadband service in the 3.5 giga hertz band.
Cable & Wireless and Gotel, which offers wireless fixed phone and other telecommunications services, also operate within the 3.5 GHz band.
