By Andrew Green, Staff Reporter
Maureen Charles, Cable & Wireless Mobile's 100,000th GSM customer, receives a gift from Cable & Wireless Snr. Vice President for Mobile Services, Ian Neita, at Cable & Wireless' Carlton Crescent offices yesterday. She activated her service on Valentine's Day.
THE MASSIVE investment Cable & Wireless (C&W) Jamaica made in its advanced mobile network last year is starting to pay off.
The company had signed up 100,000 customers on its Global System for Mobile Communications (GSM)/General Packet Radio Service (GPRS) network as of yesterday, said Ian Neita, senior vice president for mobile services. He said this was in addition to the over 500,000 customers on its existing Time Division Multiple Access (TDMA) network.
"We have diversified significantly in our revenue streams from a high dependence on international incoming calls to mobile," Mr. Neita said. Once Jamaica's monopoly telecommunications services provider, the company introduced Jamaica's first mobile phones in 1991, and this service is now starting to rival its fixed line service as a source of revenue.
FIXED LINE
The company has 500,000 fixed line customers, and faces little competition in this market.
Its push into mobile being driven by market conditions. The company is operating in a very competitive environment, "and is accountable to some shareholders who have very high demands on us," Mr. Neita said.
Revenue from international incoming calls has been reduced as these rates have been renegotiated downwards. Profits from the incoming calls had been used to subsidise the fixed line network, which itself appears to have plateaued in terms of its subscriber base and remains a drain on the company, the C&W executive said.
Gross operating revenues for the quarter ended December 31, 2003, amounted to $5.9 billion, up two per cent on both the first and second quarters of the current financial year, the company stated in a release. However gross operating revenues declined 10 per cent compared to the same nine-month period the year before as a result of another challenge, the liberalisation of the International Direct Dial business in March 2003.
Mobile service represents a major area of growth for the company, but there are major challenges even in this area. The executive said, "because of the competitive nature of the market, there is a lot of focus on mobile services as customers become more aware of the products and services."
C&W Jamaica was responsible for shouldering US$70 million of the US$104 million investment it required to introduce the advanced GSM/GPRS mobile network that Cable & Wireless installed across the region in the middle of last year.
This new technology allows voice, data and multimedia content to be transmitted on the mobile network. But it will not be used unless the content grabs the attention of subscriber.
ATTRACTIVE CONTENT
To provide attractive content, the company has started partnerships with media houses to offer customers the opportunity to rate movies as well as find out about nightly entertainment. He said, "you are going to see a number of these services coming out shortly in terms of the content."
The mobile industry worldwide has gone through significant change in that there is a lot of investment now, Mr. Neita said. The payoff was that although the new system had cannibalised some of its existing TDMA customer base to attract 100,000 GSM customers, 88 per cent of the growth came from new customers.
"This is a significant amount of growth in a very volatile market," he said. "People are switching to our network."
Cable & Wireless competes against Digicel, the market leader with well over 700,000 customers, while Oceanic Digital announced in December that it had 70,000 customers.
At the launch of the new network in July last year, Cable & Wireless said it had signed up 12,500 GSM customers in just under three weeks.
Mr. Neita told Wednesday Business on Monday that in the last two weeks, Cable & Wireless had sold 25,000 phones. This performance had come about by a more focused approach to sales, he said. Rather than trying to a scatter-shot approach to marketing, the company had chosen to focus on five specific phones which had found favour with consumers. But growth is going to get tougher.
"We are in a market that is maturing and therefore you are not going to get as many new customers as you would have got three years ago on the introduction of competition," he said. Jamaica has a relatively high level of cellular phone penetration of its market at this point.
"There are rumours on the ground that AT&T is coming, but we are prepared for them," he said. "It would change the market dynamics, but we have looked at how they operate in other markets and we are prepared if AT&T were to come."
The Cable & Wireless executive said, "We have a lot of history in this country and we are here to stay."
