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AT & T in Dominica
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© Johnson JohnRose
AT & T in Dominica
(March, 24th 2003)
The leading telecommunications provider in Dominica, Cable and Wireless, is holding back negotiations on an inter-connection agreement with the first company that is set to provide competition in the mobile telephone sector, the Sun has been told.
The American company A T and T Wireless (AWS) which was granted a licence on December 6, 2002, is preparing to launch its operations in Dominica by the summer of 2003, a company official said.
"We are at the implementation stage where we are building up the network, hiring staff, doing all the things in preparation for service," Stephanie Bariault, vice president and general manager of Caribbean services told the Sun.
Bariault, along with Nicole Bereaux, AWS' roving general manager for Dominica, St. Lucia and St.Vincent and the Grenadines, and Alex Hill, director of sales and marketing, spoke with the Sun in a conference call to discuss the company's plans for Dominica.
"We are looking at launching the service sometime this summer, but one of the major agreements that have to be completed is an inter-connection with Cable and Wireless," Bariault said.
The AWS officials refused to discuss details of the inter-connection talks with Cable and Wireless and at a recent news conference, Ian Blanchard, general manager of Cable and Wireless Dominica, was vague in his response when the issue was raised by a reporter.
"I would say it started. I would also say the inter-connection arrangement in St.Lucia with AT&T has been approved. So I believe that it will make it much easier in terms of moving forward with our inter-connection process here," Blanchard replied when asked how much progress was made in the inter-connection negotiations with AT and T.
However, a source familiar with the negotiations told the Sun that Cable and Wireless was insisting on a 14 cents charge, at least five cents higher than what AWS was prepared to pay.
"The Marpin (Telecoms and Broadcasting) 14 cents (inter-connection) agreement with Cable and wireless is causing a problem because Cable and Wireless wants to use it as a benchmark. ATT wants single digits like they have had in St. Lucia and St. Vincent and the Grenadines," the source said.
AWS has placed advertisements in the local press inviting applications to fill a number of positions which will open when it begins operations. The intention is to hire about 15 staff and to utilise other distribution services to sell hardware and prepaid cards, the AWS officials told the Sun during the conference call.
AT&T wireless is a huge global business with tremendous resources. Services revenue for its mobility business increased 29.1 per cent to $3.239 billion in the third quarter of 2002 compared to $2.508 billion for the same period the previous year. Total revenue for its mobility business increased 24.9 per cent to $3.496 billion and the company has reported 748 000 net subscriber additions.
It has teamed up with the Colonial Life Insurance Company (CLICO) as a regional partner and they are seeking local associates.
"Our approach is to have local participation and local partners in every island as well as CLICO. We are a few weeks from concluding agreement with local partner," said Hill, who, along with his colleagues refused to say who they had been talking to.
However, the Sun has been told that prominent businessman previously involved in a highly successful family business and SAT television, which has a licence to operate a fixed telephone service, have been approached.
Marlon Alexander, who heads SAT, confirmed that he had been talking with AWS, but he said they had not reached an agreement.
"Whether we can help or not I really can't say at this present moment," he told the Sun.
AWS was one of three foreign companies that were granted licences by the Eastern Caribbean Telecommunications Authority (ECTEL) last April, to operate mobile phone services in Dominica. The others, Digicel, a Northern Irish company operating out of Jamaica, the French-based company Gensat, which was also granted a licence to operate a fixed service, have since shown little or no interest in setting up operations in Dominica, mainly for financial reasons, although a source has told the Sun that Gensat recently proposed to give a major French company, 85 percent of ownership. ECTEL earlier refused a similar application from Marpin Telecoms and Broadcasting.
The mobile operators had complained about the high cost imposed on new providers by the ECTEL who were asked to pay four and a half percent of their gross revenues plus a fixed fee of EC$400,000 a year. In addition, microwave fees are EC$10,000 per link and there's an additional EC$12,000 for satellite use.
The new providers, among them AWS, had said it would not make business sense to launch a mobile service with these fees hanging over them and they would need concessions from the government if they were to begin operations.
The AWS officials told the Sun that they were able "to come to an agreement that satisfy us in terms of the business" but they would not give details, saying, "it would not be appropriate" to disclose the terms of the agreement.
However, a source familiar with the agreement told the Sun that government agreed to wave the fees for microwave links for them for two years, saving AWS at least EC$60,000 a year over the period.
In addition, AWS will be allowed to import all network equipment and material, as well as handset, free of duty, government agreed to waive the import duty and surcharge on up to five operational vehicles and there was some relief on the Universal Service Agreement under which the providers have to pay into a fund in order to extend services into difficult areas.
"(They will pay) 0.25 percent in first year, 0.5 in second year and the full one percent in the third year," the source said.
AWS also wanted the government to give an undertaking that no other provider would be granted a mobile licence but the government disagreed, the source added.
Armed with these concessions, AWS has begun to move full steam ahead with its local operations. A number of network sites have already been identified, a list has been presented to government of the equipment and material they want to bring in duty-free and work has already begun on the construction of towers, which they have agreed to allow other companies to use, the source told the Sun.
"We look at Dominica as being another key component in AT and T's network. It is a major objective for AT and T to build in the Caribbean," Hill asserted.