US$500 Million Invested in Telecommunication Sector

Commerce, Science and Technology Minister, Phillip Paulwell has said that approximately US$500 million worth of investment has taken place in the telecommunication sector since the process of liberalisation began some three years ago.

Addressing the impact of telecommunication liberalisation on the economy, the Minister said: “We have seen a dramatic increase in investment in this area”.

He told JIS News that this level of investment did not include the money received for licences issued to newcomers to the sector. “We received a windfall from Digicel and Centennial, which paid approximately $4 billion for their licences,” Mr. Paulwell said.

The Minister pointed out that the increase of 5 per cent in general consumption tax (GCT) on telecommunication services has allowed the sector to contribute “a couple more billion” to the nation’s revenue.

March 1, 2004 marks the first anniversary of full liberalisation in the industry.

Highlighting the growth in the sector since the phased liberalisation began, Mr. Paulwell noted that approximately 350 licences were granted to operators to provide telecommunication services. He also cited the lowering of prices on cellular services and international voice services, as competition in the market heightened. In regard to employment, the Minister said although there has been a reduction in staff at Cable and Wireless, overall there has been growth in employment in the industry. “Digicel has over 500 persons (employed), and in fact, Jamaica is its hub for the rest of the region. So you have Jamaicans working in their call centres providing services to St. Lucia and Barbados,” he added.

Mr. Paulwell said he had confidence in the capacity of the industry to grow even further, adding that the fourth cellular licence would be granted by year-end. He pointed out that at present, there were approximately one million Digicel subscribers; 500,000 Cable and Wireless customers; and more than 100,000 patrons served by Centennial.

The Jamaican government, in 1999, took a decision to liberalise the telecommunication industry, which was being served by the sole operator Cable and Wireless. Phase one of the liberalisation process, which lasted from March 1, 2000 to September 1, 2001 opened up the market for cellular services, with licences being issued to Digicel and Centennial. Additionally, 52 licences went to data service providers (Internet service providers) and Free Zone carriers and providers.

Phase two began on September 1, 2001 and concluded on March 1, 2003. The Telecommunications Act of 2002 was passed during this time to provide the necessary legal and regulatory framework for the sector. In addition, cable television operators were granted licences to provide Internet service, while licences were issued to Domestic Fixed Line Voice Service Providers.

The third and final phase afforded operators in the industry the opportunity to provide international telephone services without having to route these calls through the dominant operator, Cable and Wireless.