Caribbean phone wars hit Trinidad

By Robert Plummer
BBC News business reporter

People in the Caribbean twin-island republic of Trinidad and Tobago are used to what they call "plenty bacchanal" at this time of year - that is, making merry in the run-up to their world-renowned carnival.

Trinidad's phone wars have taken the local press by storm

But in the past few months, Trinis have taken to the streets on several occasions for reasons that have nothing to do with their traditional annual festivities.

In October, 10,000 people attended a rally in the capital, Port-of-Spain, to protest at the high level of violent crime. On average, one person is murdered every day in a country with a population of just 1.3 million.

In mid-November, thousands turned out at Trinidad's Piarco airport to welcome home the Soca Warriors - as the national football team are nicknamed - after their victory over Bahrain that saw them qualify for the 2006 World Cup.

Finally, on 29 November, crowds besieged several of the country's biggest shopping malls. This time, however, the motive was not an issue of national pride or well-being, but the latest stage in a bitter commercial battle that has raged across the Caribbean for the past five years.

Local telecoms company TSTT, facing competition for the first time in the mobile phone sector, was seeking to blow its future rival Digicel out of the water with a special "buy one, get one free" Christmas promotion.

Armed police had to be called in to restrain the unruly customers who mobbed the main TSTT phone outlet in Frederick Street, Port-of-Spain. Similar scenes forced three other branches to close early because of the demand.

Digicel's rise

TSTT is 51% owned by the government of Trinidad and Tobago, with global telecoms giant Cable & Wireless (C&W) holding the remaining 49%.

Historically, C&W has had a virtual monopoly in Britain's former Caribbean colonies - a monopoly that has been suffering erosion since 2001, when Irish businessman Denis O'Brien, the man behind Digicel, entered the Jamaican market with the country's first GSM mobile phone service.

Chris Gayle cut short his deal with Cable & Wireless over the row

Digicel quickly became the market leader in Jamaica and now has operations in 15 countries in the region, including Barbados, Grenada, Antigua and Barbuda, St Vincent and the Grenadines, Haiti and St Lucia.

"We generally overtake the incumbents within the first 12 months or quicker," Mr O'Brien says.

But C&W has been prepared to fight Digicel every step of the way, as the West Indies Cricket Board discovered to their cost last year.

C&W had sponsored the West Indies team until 2004, when the board signed a five-year deal worth $20m (£11.4m) with Digicel instead - a move described in some quarters as being tantamount to replacing Coke with Pepsi.

In the meantime, C&W had signed individual sponsorship deals with seven West Indies players, including Trinidad-born captain Brian Lara and big-hitting Jamaican batsman Chris Gayle.

The resulting conflict led to the seven being dropped from last year's opening West Indies Test match against South Africa in Guyana, although the weakened home team still held the visitors to a draw.

Competition delayed

Back in Trinidad and Tobago, the war between TSTT and Digicel has only just begun.

TSTT has been using huge posters of Brian Lara to promote its re-branded cellular phone service, now named Bmobile, adopting the name of existing C&W services elsewhere in the region.

Meanwhile, Digicel is not yet available in the country, despite winning the right to operate services in June 2005.

Digicel had planned to launch on 30 November, but TSTT says it will not have the equipment to allow its rival to connect to its network until 30 April - giving the incumbent time to woo new customers with its two-for-one phone deal.

At the same time, TSTT is seeking to lock all those new customers into a two-year contract, with penalties for those who terminate the agreement early - an obvious attempt to stop people switching to Digicel when the competition finally comes on stream.

TSTT and Digicel have made public attacks on each other

Digicel has responded with a series of strident full-page ads in local newspapers attacking TSTT, which it accuses of being a "bullying monopoly" and "making a mockery of the entire liberalisation process".

For its part, TSTT says it is doing all it can to comply with the need for interconnection and accuses Digicel of a "reckless, short-sighted, self-interested approach" to the issue.

As for the penalties for switching to Digicel, TSTT chief executive officer Carlos Espinal describes them as "a provision in the contract for the company to recuperate the investment we have made to allow the customer to acquire the handsets".

At the same time, C&W is facing problems elsewhere. Last November, as the angry exchanges in Trinidad and Tobago got under way, the company disclosed a 23% fall in half-year profits after a testing period in its biggest market, the UK.

Clearly the Caribbean phone wars have some way to go before they run their course - and the outcome may be felt well beyond the region itself.