Susan Gordon, Staff Reporter
LEE CHIN
FLOW, THE integrated telecommunications provider that is spending upwards of US$100 million to enter the Jamaican market, says that it is in acquisition talks with 18 local cable television providers, but rejects that its aim is to push small players out of the market and establish a monopoly.
Their aim, say Flow officials, is to gain market share and create the economies of scale that will ensure a decent return to their investment. In the end consumers will benefit from improved service because of enhanced competition and improvements in technology.
"We are not trying to own and control the market and but we want to get a sizeable share and earn a return on our investment," says Flow's general manager, Michele English.
Flow is the Jamaican operating arm of Barbados-based Columbus Communications Group, a telecommunications outfit owned by Michael Lee Chin and Canadian partner, John Risley, which provides service in 17 Caribbean countries.
Late last year Columbus completed the laying between the Dominican Republic and Jamaica of an undersea fibre optic cable that, ultimately, ends in the United States. Flow has since begun to roll out in Kingston broadband voice and Internet service and promises to eventually bundle these with cable television for consumers across Jamaica.
While Flow has applied to the Government's Broadcasting Com-mission for an islandwide cable licence, it is hoping for a short cut to what English says is to the company's goal of signing up between 300,000 and 350,000 households, or 47 per cent of Jamaica's 748,000 households, over the next three years. Currently there are an estimated 342,000 households with cable
subscriptions.
Flow has already bought one cable provider, Sauce Communi-cations and is seeking to acquire others. "We are negotiating with a wide number of companies all over the island and hoping to be able to close some acquisitions," says English. This involves "... About 18 different cable companies."
Flow also has the potential synergy of CVM Group, the media company that Lee Chin recently acquired from Neville Blythe, that includes the radio station, HOT 102, the free-to-air television station CVM TV and a small cable arm, CVM Plus.
The obvious deep pockets of Lee Chin and Mr. Risley worry some of the Jamaican operators who not only fear being driven out of business by the new entrant, but accuse the Broadcasting Commission of changing to rules to suit Flow - a claim denied by the government agency and English.
There are now about 25 cable operators, most of which are members of the Jamaica Association of Community Cable Operators (JACCO). Several JACCO mem-bers recently placed news-paper ads declaring that they had not sold to Flow and suggesting that consumers should be wary of the company.
Florence Darby, the managing director of Telstar Cable, among the more sophisticated and professionally run of the cable companies, is among the most critical of Flow's entry into the market.
Telstar was formed by Darby's husband and brother-in-law, Dennis and David, respectively, in the early 1990s when the government was attempting to bring order to the cable sector that, starting in the 1980s, developed like something of the Wild West. After years of no regulation, when rivals often dragged down each other's cable and providers pirated programmes from U.S. domestic satellite, the Broadcasting Commission to government demanded that operators have licences to operate. It was in that environment that David Darby was killed one Sunday morning while running cable for his Telstar service. There has been speculation Darby's murder may have been a hit ordered by rivals.
DARBY
According to Florence Darby the early licence were limited in the geographic areas in which they were allowed to operate. No more than two companies were allowed to operate within a specific zone, she says.
"Do you think if we could have operated in other zones we wouldn't have?" Darby, a member of JACCO, asked rhetorically.
It is that rule, she says, which has been altered for Flow.
Jacqueline Jackson, the Broadcasting Commission's information officer, rejects the view that there was ever such a policy. Limits in zones, she argues, were determined by who had permission from the utility operators, the light and power and telephone companies, to run television cable on their poles.
"There was no legal limit on the number of licences that could be issued in any one zone," says Jackson. "The only limit on the number of operations was getting permission from the utility companies to run their cables."
Flow's English concurs, insisting that her company has been done no favours.
"We haven't been treated differently from anyone else," she says. "To get a licence one of the key criteria is to show you have a pole attachment to provide service and Flow is the only company that has a national pole attachment agreement with JPS (Jamaica Public Service, the light and power company)."
Whatever the route that Flow has taken a national operating licence for cable television, Darby and others say that it will cost jobs in the sector and company's fold.
"It may very well be that we are out of business in a short while," laments Peter Brooks, who operates Omni Cable Services in Kingston. "It ss highly possible that the industry will fold with the strongest surviving."
Brooks suggests that many of the companies that now operate face serious cash flow problems, with part of the difficulty being their inability to collect fees in some of Kingston's toughest neighbourhoods.
"JPS and NWC (National Water Commission) cannot collect their money in some of these areas, so you can see already the short term cash flow position we are faced with," says Brooks. "And now I'll be faced with a competitor with the entire island. It is a question of whose money is stronger."
Adds Telstar's Florence Darby: "Thousands of Jamaicans will lose their jobs, when Flow comes."
There is no specific figure on the number of people employed by cable companies, but Darby says they include technicians and administrative staff.
English, however, is not impressed by such talk, believing it to hyperbolic.
"We don't anticipate demise in the cable industry," she says. "You'll see it is typically what happens with the new service and technology. The response from others would be to improve their services and compete."
Many consumers, apparently, are looking forward to that improved technology and service - and, perhaps, the better prices.
"If Flow comes to my bush, we will go their way," says Rudolph Briscoe, a network administrator who lives in Spanish Town, St Catherine.
Briscoe, who has a handle on the technology, is looking forward to the improvements to be had via a broadband network . "It sounds quite exciting to me," he says.
The promise of Flow's bundled service is what is exciting to Rene Pennant of Whole Life Ministries who plans to switch from her existing provider.
"I can get everything I want with just one company because the rates are good," she says, referring to the base rate $1,795 monthly Flow initially announced for its package.
