Camilo Thame, Business Reporter
Richard Pardy, chief executive officer of Columbus Communications.
When Columbus Com-munications, with its deep pocket and sophisticated ways, entered the Jamaican market promising to revolutionise the delivery cable television, conventional wisdom was that existing players would be forced into a series of mergers and acquisitions in order to compete.
But these mostly small firms appear intent on turning conventional wisdom on its head.
Not only has its network Flow found it difficult to gobble up firms, it is also contending with four new entrants into the market as well as several, at least 10, who have asked the Broadcasting Commission for approval to expand their zones of operations.
"We can compete effectively with Flow," said Clarence Chin, an IT technician at Gutherie's Communications , a provider that now operates in the Cambridge and Anchovy regions of the north-western parish of St James, but wants to expand westward, covering most of the parish of Westmoreland.
Flow is the name under which Columbus, an outfit owned by billionaire Jamaican Michael Lee-Chin and Canadian partner, John Risley, trades in Jamaica. Essentially, it is a full-service telecommunications outfit, whose offerings include a bundling of cable television, telephone and broadband Internet, based on fibre optic network, the backbone of which is a undersea cable between Jamaica and the United States.
While Jamaican cable operators have, up to now, largely operated in prescribed zones, Flow applied for an all-island licence. But at the same time it made no secret that it would prefer to short-circuit the process by buying out existing operators. So far, it is acquired one, SAUCE Communications, which it took over last year.
"Our application, which was made in March 2005, continues to be up for consideration," said Columbus' CEO, Rick Pardy. "The process may involve policy decision that take into consideration the possible impact of granting us the licence."
In the meantime, Flow is focusing on building out its network in the zones - primarily in Kingston's more affluent neighbourhoods - it is allowed to operate because of the S.A.U.C.E. acquisition.
"We hope to be finished building a brand new network in the S.A.U.C.E. network by March," said Pardy.
At stake, ultimately, is a market of 750,000 Jamaican households, an estimated 80 per cent of which have some form of cable service. Pardy estimates that 50 per cent of the households are paying customers.
He, however, intends to target between 25 per cent to 30 per cent of the market, or 75,000 to 90,000 customers. His technicians has been busy not only running trunk cables but wiring gates complexes, making future connection of subscribers a relatively easy proposition.
In the past, the major operators have hit out Flow, warning regulators of its potential dominance in the market and the likely death of competition. The suggestion, it seemed, was that it would be almost impossible for those who pioneered Jamaica's cable market to keep up with Lee Chin and Risley and the cash they would be able to pump into Flow's operation.
Such rhetoric, though, appears to be masking the reality, judging by the applications that have flowed into the Broadcast Commission by operators want to tap into under-serviced areas sections of the island.
So far, the commission has granted or approved seven licences, while another eight applicants - including Columbus/Flow - await technical evaluation of their proposals or final approval by the information ministry.
Among the new market entrants is Astra Technology, which was granted licence towards the end of last year to provide service in the eastern parish of Portland, south of its capital of Port Antonio and stretching close to the border with parish the St Thomas, just outside the town of Manchioneal.
Another firm, QES 46 Limited, has permission to operate in the western parishes of Hanover and Westmoreland, including the coastal town of Negril.
Linscom Ltd, which services the towns of Bog Walk and Ewarton in the northern section of the sprawling parish of St Catherine, has asked for a licence to extend its service to Linstead.
The plans of Unique Vision, which now services northern St James and Falmouth, in Trelawny, in the island's north, are far more ambitious. It hopes to expand along the central ridge running from St Ann to St James. Unique also has its its eye on the eastern half of parish of St Elizabeth in the south-west.
"The potential for Cornwall is right in front of us ," says Barrington Green, a director of Cornwall Communications. "But, we have to wait until the Broadcasting Commission gives us permission to go ahead."
Cornwall Communications, with operations in the Trelawny capital of Falmouth Trelawny, wants to head east towards the town towns of Duncans and as far Discovery Bay, St Ann. Cornwall Communications also intends to expand further south below the city of Montego Bay into zones, where Gutherie's Communications, with its approximately 7,000 subscribers, is the key player.
But neither the threat posed by Cornwall or that from Flow appears to phase the people at Gutherie's.
"Our biggest challenge right now is people tampering with our physical network, tapping into the cable and troubling our power amp supplies," says Chin, the IT technician.
camilo.thame@gleanerjm.com
