Mobile Manoeuvrings: The State of Play
Chess has long been considered the sport of kings and aristocrats, although only in the last century has it become popular among all levels of society. A game of logic, Chess exercises the mind by requiring players to think logically, forcing them to think ahead and to analyze complex individual, yet interdependent factors. It has been said that Chess is a good way to learn about life and that a person with the facility to win at Chess is ready to conquer any complex problem on either a personal or business level. The progress of deregulation of telecommunications in the Barbados and Caribbean market can be also be seen from the perspective of a chess game, with moves and countermoves, attack and defence by the various players and regulatory authorities.
The term “opening” refers to the choices made by the players in their initial moves when they engage in preliminary skirmishes and battles to set up their respective positions on the chessboard and attempt to prevent other players from achieving their own goals. It also lays a good foundation for the development and execution of long-term strategy.
In Barbados, the Telecommunications Division of the Ministry of International Business and Transport opened the liberalisation game by laying a Green Paper on Telecommunications Sector Policy in Parliament in 2000. In so doing, the Government indicated its awareness that “rapidly advancing telecommunications is a prime means to achieve a wide range of social and economic goals in numerous socially oriented sectors.”
Once mobile licenses were issued in March 2003 to three new providers – AT&T Wireless, Digicel and Sunbeach Communications as well as to the incumbent Cable and Wireless (C&W), the new “boys on the block” geared up in anticipation of an early start in August 2003. However hold-ups in negotiating and signing the interconnection agreement delayed actual commencement until February 2004. This was a challenge to the new entrants since they could not actually offer services or compete as effectively as planned in the mobile market, yet still had to put in place and maintain substantial staff, office and service infrastructure.
The middlegame phase is where the mastery of good chess moves becomes evident. The greatest percentage of games played are decided and concluded during the middlegame either by checkmate, an agreed draw, or a stalemate. As a recognized chess author indicates “A fundamental necessity both for a successful attack and a correct defence is the formation of a sound plan, and the logical adherence to this plan despite any seductive alternatives that may present themselves during the course of the play.”
The middle game in telecommunications in Barbados has constituted jockeying and manoeuvring for position by the three active players C&W, Digicel and AT&T through a variety of creative strategies and extensive marketing campaigns and promotions, each seeking to outdo the others.
These campaigns have run the gamut from handset giveaways to use of radio personalities with distinctive voices, from flat-rate long-distance calling to numerous versions of pre- and post-paid calling packages, from sponsoring music shows, cultural and sporting events to Runabout competitions. Campaigns, promotions and marketing efforts have been both “across-the-board” aimed at mass-markets as well as more specific focusing on special interest groups and niche segments including business, youth and teens.
The middle game heated up even further when international licenses were issued to the other mobile carriers on Feb 21, 2005.
The result of this mid-game manoeuvring has been an explosion of mobile phone usage of over 250%, from 80,000 in February 2004 to over 200,000 in July 2005. Rates have plummeted even more sharply, with respect to both local and overseas charges, as fierce competition and constant move and countermove have taken place. Quality of service and coverage has also increased with cell sites rising from 30+ to over 100 across the country as each player has tried to consolidate and strengthen its position. Barbadian users and visitors alike can now reasonably take for granted mobile access at virtually every point across the island.
Barbados meanwhile continues to keep pace with trends and costs available in the industrialised markets. A CEO of one of the three active telecommunications companies in Barbados was of the opinion that the choice and variety of mobile handsets and their related costs in Barbados and the Caribbean are comparable with, and sometimes better than, those in the USA or UK.
GPRS, SMS, Blackberry’s and VoIP can therefore be viewed as “pawns” used by the various players to advance their progress in the fiercely competitive mobile arena in Barbados. According to another senior industry executive, the Internet continues to create more knowledgeable and technology savvy computer and mobile users, and they in turn drive local demand for new services as fast as these are released internationally. Without doubt that has been the case in Barbados, where SMS is more widely used than in the rest of the Caribbean.
The mobile telephony activity and usage patterns in Barbados have therefore mirrored those identified in the Americas ICT market where “…industry giants are seeking to expand, acquire and secure customer bases as their established revenue models are transformed” . The local fixed and mobile carriers are constantly seeking greater scale and greater share of the communications services markets (international, local, data) both to cover their investments in next-generation networks and also to capitalize on the accelerating convergence of fixed, mobile and data services.
Telecommunications service in Barbados, as elsewhere in the world, is increasingly defined by two key service phenomena:
– The increasing adoption of VoIP
– Continued convergence of voice and data, as well as fixed and mobile services.
The more data and information are carried the more prices will move downwards which, in turn, will result in more usage. Industry sources indicate that there is even the possibility of free email on mobile handsets in the not-so-distant future here in Barbados.
And what of the sole inactive player originally granted a mobile license in 2003? In its last annual report Sunbeach Communications Inc indicated that its delay in providing service was due to “…slower than anticipated fund-raising for the purpose of entry into the cellular market” . For this player, the result has been stalemate.
In the US the telecommunications market has seen a dramatic transformation over the past 30 years. In the early eighties there were three main players which mushroomed and exploded into over 1400 providers at the height of this expansion in the late nineties. However mergers, acquisitions, consolidations and convergence have resulted in a return to a position in 2005 where there are once again three dominant service providers and a group of smaller contestants.
A similar phenomenon has already occurred in Barbados where the Government’s intent was to have four players in the mobile marketplace as evidenced by the number of mobile licenses issued. However Digicel has now bid for the Cingular mobile business in Barbados and the region, after Cingular itself in 2004 had acquired the AT&T Wireless business worldwide, including that in Barbados and the Caribbean.
If this acquisition is approved it will mean that in reality there will only be two active players in the Barbadian mobile arena, both of whom will be getting ready for pitched battle. It is to be hoped that reduced competition will not lead to a change in what has resulted so far in the deregulated market since 2004 to the benefit of the consumer – better choice of mobile handsets, better calling options, better geographic coverage, better roaming capabilities, generally better service and all at significantly lower rates than prior to deregulation.
In its most simple usage, the endgame refers to that time in the game after the players have made a significant number of definitive moves and when checkmate, resignation, draw, or stalemate is inevitable. Endgames are therefore seen as combining beauty and practicality in the game of chess, and many a hard fought middlegame has indeed been lost to poor endgame technique and performance.
So where do we go from here? What are the experts predicting both internationally and locally? How is the “game” likely to end?
As a number of industry observers have put it…
” .. powerful technological and commercial forces are propelling convergence of the IT, telecommunications and media industries.”
“.. within the next few years VoIP could represent more than 80 percent of business telephony.”
“.. by the end of 2005, there will be nearly 2 billion cellular mobile subscriptions worldwide, with subscriber growth strongest in developing countries .. mobile voice volumes will continue to grow steadily due to ease of use and falling prices … and penetration will surpass 100% as more customers take a second subscription for data or for personal use.”
All of the local players, active and inactive, are of the belief that the Barbados and Caribbean markets are still not fully exploited and that there are many areas of opportunity and potential for growth. These opportunities include new services such as video-streaming and MMS as well as particular market segments such as youth, corporate, self-employed, and post-paid. Other areas of growth include roaming packages that are Caribbean-wide at one fixed rate, seamless regional handset mobility for the prepaid platform, and the entire area of data and Internet access.
There are also other regional telecommunication entities which may soon need to be considered. For example, in August 2005 LaqTel announced that it has entered the mobile arena in Trinidad and is making plans to compete in Barbados in the near future.
The vital areas of security will not be forgotten as local industry sources have confirmed that PDA security features released internationally will be made available simultaneously in Barbados. In addition, other potential players are waiting in the wings whose traditional lines of business are not telecommunications i.e. cable media operators, utility and technology companies.
As Barbados moves into 2006 and the ICC World Cup year 2007, locals and visitors alike can expect to continue to benefit from international and local competition in the mobile arena. The differentiation between providers will continue to be customer service and packaging that meets the value profile of the consumer.
In this struggle for control of the Barbados and Caribbean mobile market, while the middle game may have been fought, the endgame combatants are now marshalling their forces. The outcome remains uncertain but the active players, and future entrants, are still engaged in planning strategic moves which, they hope, will end the game and determine the outcome in their favour, thereby giving them eventual control of the “board”.