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Tuesday, 4 October 2011
Competitiveness in the Jamaican Telecom Sector
Topic: Business
Dear Editor, I write with regard to Al Edwards’ article entitled “Answering LIME’s Factotums – Here and Elsewhere”, published in the Caribbean Business Report of September 30, 2011.  I have been following the debate about the Digicel/Claro deal and have also noted the two letters referred to: namely, “Don’t Tie the Competition’s Hands Behind Its Back” by Martin Bailey, and “Disingenuous Mr. Edwards” by David Headley.  However, I happen to subscribe to the views these letter-writers on the matter. In fact, I take exception to the tone of Mr. Edwards’ article.  Irrespective of whether he disagrees with their views or not, I would have expected a seasoned journalist to show more restraint and at the very least respect their right to hold an opposing view: just as I expect to respect his viewpoint.  Nevertheless, let me get “to the heart of the matter”. The matter at hand is to ensure competition exists between local telecoms, be they LIME, Claro, Digicel, or any other: the same competition that allowed Digicel to become the market leader.  As such, this organization of industry could be discussed without reference to any of the know competitors and the letter writers seen to be simply defending the status quo and being unwilling to see the gains eroded by allowing one telecom to achieve market dominance.  If we assume for the moment that “LIME has lost its competitive edge”, is this not reason in itself to ensure competition is maintained in the marketplace? It was also said that Claro “had to retreat due to its inability to permeate Digicel’s impenetrability”.  But, didn’t Digicel also retreat from Claro’s market?  When Claro took over Oceanic Digital’s MiPhone operation in Jamaica, it was rumoured that this was in response to Digicel’s entry into their primary market.  So, Claro’s primary goal would not have been to become market leader in Jamaica but rather to ensure Digicel could not expand in their primary market.  Who really achieved their objectives here?  If Jamaica did not have a third telecom, this scenario could not have been easily realized. The free market system cannot be left unregulated.  It is the duty of government to provide a framework which facilitates competition.  The approval of Digicel’s acquisition of Claro Jamaica was granted by the Prime Minister “in a statement to parliament on August 30, 2011” with conditions.  It is reasonable to assume that the condition of Digicel having to operate Claro Jamaica as a distinct operation was a save-guard to preserve competition.  So, Digicel cannot “rationalize its operations, unify and update its network”. Despite what we remember of Cable and Wireless Jamaica, before they became LIME, let us not forget that Cable and Wireless Jamaica was once called the Jamaica Telephone Company: an entity which had been nationalized by the government at the time and was later divested to LIME’s parent company Cable and Wireless: just as our ‘beloved’ Jamaica Public Service was also divested.  Even if it had been common knowledge at the time that Cable and Wireless would have been granted a guaranteed monopoly, no one would have cared.  We all thought what we were getting was superior to what we had.  Let us not make the same mistake again.  Let us maintain and improve what we have achieved to date and not erode it by allowing any telecom to achieve market dominance, especially by acquisition. Paul Hay MBA, BA(Arch.)Managing PartnerPAUL HAY Capital Projects Caribbean Capital Projects Management    P. O. Box 3367Constant Springs, Kgn. 8Jamaica, W.I. tel: 1 (876) 756-0631cel: 1 (876) 324-4274fax: 1 (876) 756-0631 e-mail: paul.hay@phcjam.comskype name: phcjamtwitter: 

Posted by phcjam at 4:29 PM EDT

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