DIGICEL CHAIRMAN Denis O'Brien says a 'vicious' war could break out between his company and Cable & Wireless (C&W) over access to the Caribbean market.
Digicel's chief executive, Seamus Lynch, told Wednesday Business that an outside investor looking at Jamaica's statistics would hesitate to put their money into the country. However, in reality, Jamaica is a very valuable market for a player like Digicel.
"If you sit behind a desk in the UK and looked at the standard indicators for Jamaica, you would never invest," he said. The national income is low, unemployment is high and crime is high.
"We ignored all the statistics," he said. "The statistics are inaccurate. They don't paint an accurate picture of the country."
The battle for the Caribbean is over one of the most profitable areas of the telecommunications market in the world, Mr. O'Brien said in an interview with the Financial Times last week. The Caribbean has the most profitable of C&W's operations and Digicel saw the opportunity to secure itself in the market as the C&W monopoly is phased out.
It is the only place in the world where Digicel could compete with C&W as the second player, Mr. O'Brien said. Other markets in the world already have several players in the cellular communications market.
An initial US$100 million investment in Jamaica is in the process of being quadrupled, pushing Digicel to the position market leader.
"The penetration level has gone right up in the last two years," Mr. Lynch said. "People who were never able to make telephone calls now have full access to telecommunications."
With claims of one million cellular service subscribers in a population of 2.6 million, penetration of cellular service is similar to European levels, Mr. Lynch said. And customer spending is also similar to European levels. "Business is good and it is strong" Mr. Lynch said. "Hopefully we will be able to carry it right across the Caribbean."
And this is where the hard feelings have come in, as Digicel wants to reproduce its success in Jamaica right across the region. But Mr. Lynch says C&W is stalling on allowing interconnection between the systems of the two companies in St. Vincent and St. Lucia. Interconnection would allow the existing C&W customers to communicate with Digicel customers. Cable & Wireless has denied the charge, saying they are carrying out their obligations at a reasonable pace. Mr O'Brien told the Financial Times that Digicel could get 'very vicious' if the problems continued.
"We won't take it lying down," Mr. Lynch said. "We will do everything in our power to resolve the problem."
