Ashford W. Meikle, Staff Reporter
DAVIS
THE PRESIDENT and CEO of Cable and Wireless Jamaica Limited (C&WJ), Rodney Davis, says the company is clawing back market share in the increasingly competitive cellular market from its main competitor, Digicel.
"We are getting back market share - there is no debate about that. There is a swing in the direction of Cable & Wireless in the mobile market [since September 2005]. I am very confident that it will continue," said the upbeat CEO. He was addressing the inaugural DB&G investors' briefing yesterday at its merchant bank headquarters on Holborn Road.
Davis challenged the audience to "ask my customers, ask the retailers who sell our top up cards. There is no debate among our retail distribution network about the impact on revenue." He claimed that since the launch of the company's advertising campaign last September C&WJ's "minutes of usage, are up 62 per cent. The number of [new] subscribers we've had is just under 10 per cent."
Last September the full service telecommunications provider launched an aggressive $100 million marketing campaign, the 10/8 Anyone Plan, designed to woo mobile users to Cable and Wireless with discounts on calls to other networks, depending on their calling pattern. It costs an average of $17 per minute to make inter-network calls among Jamaica's cellular companies. With the Anyone Plan, with calls priced as low as $8 per minute, calling costs would have been reduced by over 50 per cent. With this plan, C&WJ is hoping that customers will switch, making bmobile their primary cellular phone.
IMMEDIATE REFLECTION
However, Davis shied away from quantifying the success of the campaign, vis-á-vis the number of C&WJ cellular users. "We've always said from the beginning that we're not going to be doing this hype thing of running around, talking about our numbers every month and say everything's fine. [But] we are not losing market share," Davis insisted.
The CEO said that it was not reasonable to see an immediate reflection of the increased business in the company's financials.
"I've always said that it will take six to nine months before you start to notice it. As market share increases the out payments will level as revenue increases."
However, the Cable and Wireless boss refused to give a time frame as to when he intends to displace Digicel as the number one mobile provider. Nor did he give any indication as to the real performance of the mobile segment to C&WJ's bottomline. The communications giant ceased segment reporting last year, an action Davis defended again, saying it did not reflect the true dynamics of the company's performance.
FASTEST GROWING AREAS
Nevertheless, while the mobile market is one of the fastest growing areas of C&WJ's operations, it is not the biggest contribution to its profits.
"If you are talking about gross margins or contribution to profit, mobile is not the most profitable segment."
Davis also noted that there were no plans to force C&WJ's TDMA customers onto the GSM operating platform.
"We have a fairly aggressive plan to migrate TDMA customers but at the end of the day it has got to be the customers' decision. I have no intention of forcing customers off the TDMA network unless it becomes completely uneconomic to keep them on the network."
However, he predicted that in less than two years, because of the obsolete technology, TDMA customers would go over to bmobile.
"I think within the next 12 to 18 months you should see the majority of customers migrating off the TDMA network ... We don't sell the TDMA handsets anymore . The technology itself will dictate that customers will get new handsets which are on the GSM network."
