The value of Claro talkers: J$1.5b
Published:Wednesday | January 18, 2012 | 12:00 AM
Telecoms competitors are collectively offering up to J$1.5 billion worth of talk-time to sway Claro Jamaica customers to the respective networks of LIME and Digicel in a fight for half a million subscribers on the network.
But if, as Digicel has said, it only expects to gain an additional 40,000 new customers from the merger as most of Claro's subscribers were already Digicel clients, the giveaway of talk credit would be valued at less than J$600 million. This also assumes that LIME and Claro have no subscribers in common.
Cell operator Digicel offered Claro customers J$2,000 free credit on Monday following LIME's initial offer of J$1,000 with an additional free SIM chip valued at some $500 at the weekend.
These offers equate to two and three weeks of average spend of customers based on the J$2,600 per month average spend on mobile calls, according to the latest Quarterly Report for Telecommunications Sector Entities published by the Office of Utilities Regulation which oversees the industry.
There are some 2.9 million mobile subscribers in a population of 2.7 million people.
Digicel remains the largest mobile player, followed by LIME, but the subscriber base remains undisclosed. Claro's subscriber base hovers at 517,000, according to government disclosures on the acquisition of Claro by Digicel.
weekend assault
On Friday, LIME Managing Director Gary Sinclair voiced plans of a weekend assault for Claro customers. It was followed by a Digicel counteraction.
"We will aggressively go after Claro customers and other cell customers in general," he told Wednesday Business at the local launch of the Apple iPhone 4S, a phone aimed to give LIME a competitive advantage in the data market.
When asked if Sinclair believed Digicel would attempt to lock Claro customers to its network, he said: "I am positive that that is what they are doing."
The offer runs until monthend on both networks. Digicel's decision to shut down the Claro network on March 1, following an announced asset swap spanning Central America and Jamaica, inked a year ago but subjected to regulatory approval. Digicel offers Claro customers the opportunity to keep their existing numbers, "and in addition have their main Claro balance transferred to their new Digicel account", said Digicel Jamaica Commercial Director Jason Corrigan in a company-issued release.
When asked if LIME would up its offer, Stephen Price, head of marketing, LIME Jamaica, said Claro customers can make their own decision as to which provides superior value.
Better value
"We are aware that our competitors have come with a counter-offer but numerous Claro subscribers are well aware that LIME offers bigger savings, better value for money and superior technology with our 3G data network," said Price.
In August, former Prime Minister Bruce Golding insisted that Digicel operate two separate networks. But last week, the utility regulator revealed that Andrew Holness, who succeeded Golding as prime minister, withdrew the two-network requirement.
Holness made his decision following stakeholder consultation.
But Sinclair said last week that he was not among those consulted.
"I did not get a call from him ... I can't say if he did call my chairman or others but he didn't call me," said Sinclair, who again reiterated LIME's position that the closure of Claro would facilitate the formation of a "super-dominant" player.
"If I had been asked, I would have told the prime minister that it's an ill-advised move, as his predecessor studied the area and clearly recognised the requirement of a separate network," he said.
"However, if you are advised to go down that ill-advised road you cannot do it unless the legislation you have tabled gets debated first and enacted, which will give you the ability to impose rates. Then to my mind you could remove the impediment of Digicel building out a single network," said Sinclair.
LIME, formerly Cable and Wireless, was quickly relegated to second place in the cellphone market following Digicel's entry in 2001. LIME's business includes fixed line, Internet and data, but the company has struggled with multibillion losses for several years.