BRIDGETOWN, Barbados-Barbados has identified wireless and the Internet as the first segments of its telecommunications market to be opened to competition. A three-phase timetable announced by the government anticipates full liberalization by 2002.
Minister of International Business Reginald Farley, who has responsibility for telecommunications, tabled a policy document, or “green paper,” in parliament in February and announced a cellular license could be awarded in a few months. The policy document is expected to be approved by parliament quickly.
It remains unclear, however, what form of spectrum plan the government has in place to introduce competition. In addition, the number of licenses to be awarded and the type of technology standard have not been decided.
Whether Barbados will follow Jamaica’s move, which awarded one CDMA license and one GSM license last year, is unclear, as well as whether the auction system of awarding licenses will be used. These are key issues for prospective investors.
A senior private-sector official, who requested anonymity, said there is concern the incumbent telecommunications monopoly, Cable & Wireless, might well be able to slash rates, offer free phones and implement other strategies to constrain the viability of competition. But the source said his company will bid for a cellular license.
Cable & Wireless Caribbean Cellular (Barbados), a joint venture of the Cable & Wireless companies that run the telephone service and external telecommunications, has a digital mobile network in place and has been upgrading its network of cell sites. In addition, it has been offering attractive pricing plans for consumers, some of whom regard the cost of handsets and peak-hour, per-minute charges of US$0.42 to be deterrents. New plans have led to lower costs for the handsets.
Phillip Cross, the International Telecommunication Union (ITU) Caribbean area representative, said wireless is the quickest route to roll out new services. He said that with one existing provider in Cable & Wireless, the radio spectrum is available to award two or more cellular licenses. Cross added that given the size of the populations and countries in the Caribbean, two additional providers might allow for sustainable competition.
Since the start-up of cellular services in Barbados in 1991, when 370 subscribers signed on that year, the number of users increased to 20,309 at the end of March 2000, the green paper reported. And despite the fact that Barbados, a small Eastern Caribbean island of just one-quarter of a million people, has one of the highest landline telephone penetration rates in the region at just more than 40 percent, the market for new cellular customers appears quite large. The country’s strong wireless potential lies in its current low mobile penetration and business from tourists.
The most eastern of the Caribbean island nations, Barbados is a popular destination for tourists from Europe, where GSM is the dominant cellular standard. Cable & Wireless’ local network is based on TDMA technology, the dominant standard in the Americas.
“It is important for Barbados and most of the other Caribbean countries which have not yet awarded cellular licenses to ensure that suitable frequency bands are available for GSM and CDMA cellular service providers,” Cross said.
In Barbados and the wider Caribbean, Cable & Wireless continues to be at the center of criticism from some government leaders who take issue with its repeated assertion that it welcomes competition, but in an environment where independent regulatory bodies and regulations are in place that allow “fair” competition to thrive. Some regulatory bodies in the Caribbean have been established, but they are still looking for staff. This is the case in Barbados, for example.
Conflict in St. Lucia
In St. Lucia, Cable & Wireless recently announced plans to terminate its operations because of alleged failure to negotiate a new agreement with the government ahead of the expiration of its licenses on 31 March, 2001.
“Cable & Wireless is fully committed to the liberalization of telecommunications in the Caribbean. Liberalization should take place in a fair and orderly manner in order to ensure sustainable competition. To achieve this, it is essential to have well-structured legislation, effective regulation and an independent regulator. Cable & Wireless is committed to working toward this objective,” the company said in a statement.
It subsequently denied reports in the regional media that the “plans to leave St. Lucia” were consistent with a policy to pull out of the wider Caribbean. Interconnection arrangements in a competitive environment, rate rebalancing and universal access fund charges are among issues that are believed to be sticking points or issues that had not been negotiated to its satisfaction.
St. Lucia’s Prime Minister, Dr. Kenny Anthony, accused Cable & Wireless of attempting to remove St. Lucia from regional negotiations on liberalization in reports from the Caribbean Media Corp. (CMC), which has a regional wire service. He said the sovereignty of the Organization of Eastern Caribbean States (OECS) mattered, and if countries were to engage Cable & Wireless individually, they would be hurt.
Global Wireless reported in its January-February 2001 issue that five Eastern Caribbean countries-Dominica, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, and Grenada-had passed legislation on telecommunications liberalization and set up a regulatory body to oversee competition in the new year. At press time, liberalization developments in the telecommunications industry were on the agenda of a meeting of Caribbean leaders in Barbados.
