DURING conversations about Jamaica, Brendan Paddick can’t resist making passing reference to his tortuous 10-mile journey from the Norman Manley International Airport in Kingston, to Gordon House, six years ago.

Hurricane Ivan had just sideswiped the south of the island, and the capital — though spared its full brunt — was certainly not unscathed.

As the storm menacingly wormed its way along the coast, it carved out a swath of destruction that left in tatters an already strained civil infrastructure — the grief extending from Morant Point in the east to Negril to the west.

On the way, dislodged boulders, crater-sized sinkholes, uprooted trees and utility poles provided the visitor with the first visual evidence of the colossal rebuilding task ahead.

Yet, a less visible but equally ominous development had drawn this entrepreneur to Jamaica. In the aftermath of the storm, a telecommunications blackout had blanketed the country, isolating it from the rest of the world, and exposing the inherent weakness in its reliance on a single provider for the backbone of its global links.

Seated in the SUV beside the Canadian businessman was Michael Lee Chin. In 1999, the billionaire had bought National Commercial Bank (NCB), using money he had made in Canada; he was still brimming with pride over his serendipitous investment. It was at his invitation that Paddick had ventured from the relative safety of his country into what must have appeared to him to be a hurricane-ravaged environment.

Part-owner and CEO of an Internet and cable television company that served 1,200 towns in Canada, Paddick and his partner John Risley had recently sold the firm, and had used part of the proceeds to fully capitalise another cable services outfit they bought in The Bahamas. They still had a lot of cash on hand, and were in an acquisition mode.

“John Risley looks for new growth markets to take advantage of our core competencies,” explains Paddick.

Their formula, developed in Canada and perfected in The Bahamas, calls for the acquisition of existing systems, “investing heavily to upgrade them with state-of-the-art technology, integrating them to create critical mass and marketing them in a manner that was relevant to our customers”.

According to Paddick, “the Caribbean fit this bill to a T”.

By time the Canadian investor and his team began scouting Jamaica for opportunities, important segments of the telecoms sector were already open to multiple carriers. There was, however, legislative timidity in addressing weaknesses within other critical areas of the market.

The upshot was that Jamaica was still being served by a single undersea cable platform that was owned and operated by a single provider.

“The entire country was without telephone or Internet service as the only submarine cable system serving the island had been damaged by the hurricane,” says Paddick.

“Michael and I flew to Jamaica in the hurricane’s aftermath, and actually drove to Kingston from Norman Manley airport while bulldozers were still clearing the sand from the road to the airport and the country was largely without power,” he continues. “We drove straight to Gordon House where all the members were debating an emergency measures bill to assist with the relief efforts.”

The islandwide blackout began to test public patience with the status quo; Paddick and his investors found themselves at the right place at the right time.

“Mr Lee Chin and I then met with then minister, Philip Paulwell,” he says. “We asked if Columbus could build a second fibre-optic network to the United States to ensure that Jamaica would never again find itself isolated from the outside world.”

In the face of such a confluence of factors, governmental complacency quickly gave way to bold and decisive action. Within weeks, the Office of Utilities Regulation (OUR) issued tender notices for licences to lay down subsea fibre-optic cables.

In 2005, two companies were awarded licences, but Columbus Communications (International) was the only one to make good on the promise to pull Jamaica towards the cutting edge of global communication services.

Paddick, the founder and executive chairman, and Risley control 64 per cent of Columbus International — the parent of Flow. Lee Chin personally owns 10 per cent, while the private equity funds that he manages claim ownership to another 20 per cent. The other six per cent is owned by Columbus’ management team.

It took US$35 million to lay down the first set of cables, from Bull Bay — the south-eastern tip of the island — to the Dominican Republic. By 2006, Jamaica was plugged into the subsea network that Flow already had on the seabed connecting the DR to Florida.

Within two years, an alternative line was completed, this time linking Morant Point — Jamaica’s most easterly tip — to Boca Raton in Florida. Not only did Flow invest in capacity that placed it light years ahead of the competition, but it now had the requisite redundancy so as to be able to offer customers reasonable assurance of uninterrupted services.

Such security has not come cheap: the investors have had to find US$1 billion — through a combination of equity and debt — in order to lay claim to this regional industry.

Here is a snapshot of what this money has bought them:

Columbus now owns 14,000 kilometres of underwater fibre-optic cables that form a ring connecting the islands to North, Central and South America. It provides the backbone for the company’s retail businesses here in Jamaica, as well as in Trinidad, Grenada and Curacao. Additionally, 22 countries in South and Central America now depend on this infrastructure to transport their data across the globe.

The US$250million that Flow has spent in building out the Jamaican market accounts for roughly 25 per cent of the total outlay inside the region. With this expenditure, Flow has been able to take its high-capacity broadband cables in close reach of 300,000 households and businesses, or roughly half of Jamaica’s market. Already, 150,000 of them have signed up for the services. The company provides direct employment for 565 individuals, while engaging another 200 as outside contractors.

But that is only half the story.

Flow began operating here in 2006, its vaunted converged technology immediately setting it apart as the most formidable player in three of the four discrete market segments it targeted — cable television; retail Internet service provider; and as a wholesaler of broadband capacity to phone companies, ISPs, corporate Jamaica and public institutions. It remains a relative minion as a provider of landline telephone services.

Three of Flow’s executives in Jamaica — the CEO, Michele English; engineering director Carlton Baxter; and marketing director Sharon Roper — speak with unconstrained pride of the fact that their company has been able to drag down the costs of high-capacity services to corporate customers by as much as 98 per cent on a per megabit basis.

“We have driven commercial prices down by as much as 98 per cent and residential by 76 per cent for Internet services,” notes English. “Prior to our entry there was no broadband.”

Roper argues that Flow has made Jamaica a more competitive jurisdiction for investors in a range of services that require competitively priced broadband capacity. “We have instantly become more competitive,” she beams. “When JAMPRO goes out to market Jamaica, this will make the country an easier sell.”

The numbers are indeed nothing short of staggering. Prior to Flow’s entry, companies, like large call centres that require heavy broadband capacity to Miami, had to fork out US$160,000 each month. Now they can pay Flow US$35,000 per month for the same capacity. Those that used to pay US$7,000 per month can now get the same service from Flow for US$148.

While the numbers speak volumes, one also has to listen to those individuals who have been affected by the presence of this company here, to fully appreciate the true depth of the financial and psychological impact it has had.

“Flow has played an important role in getting us closer to universal access,” declares Dr Patrick Dallas, an ICT and control engineer consultant. “The company has had a tremendous impact on businesses. Their promised 100-megabit capacity will revolutionise the way and the speed and efficiency with which local businesses will carry out functions that demand high capacity.”

Dr Dallas stresses that an important dimension of Flow’s presence in Jamaica is the new approach to pricing the services it has forced on the entire industry.

“When we had only one provider they could set any price they chose,” he asserts. “Now that Flow is in the market there is a closer alignment between the costs of providing the services, and the charges to the consumers.”

The technology expert is also convinced that Flow is the company — with its proven aggressiveness in high-capacity broadband offerings — that will lead the transformation of how ordinary Jamaican households are entertained within the next few years.

“Universal access to broadband will change the way we entertain and live,” he says. “People will be able to stay at home and access a whole host of services, including Internet protocol television. High capacity is now available to businesses, but once the prices come down it will become available to the household market.”

An equally ringing endorsement of Flow’s services comes from an unlikely source: a competitor, who also happens to be a client.

“Flow is a competitor to us in the Internet market, but somehow, they have been able to successfully separate their retail from their wholesale line,” says Andrew Pairman, whose firm, Anbell Agencies, offers Internet and a whole host of other services to the public. “This allows us to be a customer and a competitor at the same time.”

Pairman, who buys bandwidth from Flow to support his business, says he is elated that this company invested here.

“We are very pleased that Flow came on the scene,” he says. “Not only do they allow for redundancy with LIME, but their bandwidth is stable and once they came on the market we saw wholesale rates go down by about 40 per cent, also retail Internet rates. They are able to give you pretty much what you want; there is a great deal of flexibility in the system, in that they can turn up the level of the bandwidth.”

Paddick and his team would, with some amount of justification, be tempted to pat themselves on the back to hear other testimonials about how their investment has been reshaping the corporate landscape inside Jamaica.

“Flow is the most reliable Internet service provider in the island,” says Joel Jones, business development manager at a small online brand management and hosting outfit called Blitz Web Design. “We have tried the others, so we know that there is no doubt about that. We have found them to be very reliable in their upload and download speed, and we are constantly doing uploads to our service.”

Jones also gives high marks to Flow “for bringing more competition to the field and for pushing the speed barrier, which is even more valuable than price, which has also fallen. They have changed the market. They have set a new benchmark within the industry.”

With such flattering testimonials coming from within the very core of the industry, one could allow Paddick this small indulgence in self-congratulation:

“Quite frankly, we believe we have levelled the playing field for business operating in Jamaica. The cost of high-quality telecom services is no longer a competitive disadvantage. In fact, compared to many markets in the Caribbean, the telecom products and services now available from Flow, Digicel, Claro, LIME and others, position Jamaican businesses with a distinct competitive advantage.”

When this Canadian investor, his financial backers and senior management team began their SWOT analysis of the Jamaican environment, they would have been encouraged by the opportunities waiting to be unlocked within their target markets.

They would have taken note of the monopoly-controlled undersea cable infrastructure, its technical and capacity limitations, and importantly, the punishing prices that companies operating in Jamaica had to pay to gain access to the global markets.

Paddick acknowledges as much: “Businesses really only had one provider to consider when trying to use telecommunications to power the growth of their companies. We saw a huge opportunity to fill an obvious void, offer consumers a choice of providers and introduce a host of new products and services readily available in North America, but sadly lacking in Jamaica.”

There was also the potential to earn revenue as a retailer of Internet services — a more complex market segment because of its dominance by a large player that co-existed with several, mostly small, upstarts.

The cable television industry presented another murky picture. There were over 50 players, but any notion that there was real competition within this subsector would have been undermined by the geographic limitation of their reach as individual service providers.

“None of them was investing heavily in upgrading their networks,” says Paddick. “For the most part, these networks were one-way, analog systems that were not capable of offering services that Jamaicans demanded… services such as digital cable TV, HD TV, high-speed Internet or digital voice services.”

The high-quality cable signals piped into the homes of Jamaicans include digital cable television with over 240 channels and a battery of features that have introduced a little piece of the First World, not just to affluent communities here, but even to unmistakably Third-World homes and environs.

“The quality is good,” beams Marcus James. “I was with another cable service provider but switched to Flow over a year ago.”

James, the CEO of Access Financial Services, lives in an upscale Kingston 8 neighbourhood, and for the past year-and-a-half, has signed up for the high-definition cable television package offered by Flow. A sports aficionado, he is thrilled by the fact that he can replay a point while watching tennis.

“I like the user interface,” he says. “I also like the fact that I can record programmes. It is really a First-World service.”

Flow’s Carlton Baxter relates an experience that highlights another aspect of the company’s commitment to quality.

According to Baxter, on a visit to Jamaica a few years ago, he was pleasantly surprised by the quality workmanship he observed; as contractors went about installing fibre optic cable lines throughout Kingston.

He found out the name of the firm that was behind the build out, and offered his skills to the company.

“I was offered a position and accepted it without thinking twice,” says the current engineering director, who at the time was working at a large telephone firm in the USA.

Michele English says that Flow’s corporate ethos that emphasises quality, permeates the entire organisation — even the outside contractors.

“When we started out, Jamaica did not have the expertise or equipment to do the kind of work that we wanted to do, so we brought in foreigners with the experience and they trained the locals,” she says.

This is not to say that Flow did not have early challenges, or that its entry to Jamaica was without controversy. In fact, Paddick shares with us his eidetic recollection of some of the issues that almost thwarted his investment in Jamaica.

“We found ourselves in a bit of uncharted water,” he explains. “We had a new subsea fibre-optic cable licence, but we did not have a domestic subsea fibre business to survive; we had to create demand for the network, so we set out to create our own demand.

“While we applied for all the requisite licences from the OUR and Broadcasting Commission, we started to acquire a few small, yet strategic, companies — companies that already had the requisite licences and a small existing customer base so that we could pursue our aggressive network expansion plans without offending any regulatory or statutory rules that may have applied.

“When you have millions of dollars of equipment waiting to clear customs, expensive consultants on the ground waiting to instal equipment and bank covenants that dictate where and when your network was to be constructed, waiting for approvals that you know would be forthcoming was a balancing act, at best.”

Yet there were cable service providers who constantly complained to the media that Flow was an imperious competitor that was bent on driving the small operators out of the market; they also objected to the Government’s decision to grant the company a national licence.

The owner of three cable firms took his own quarrel with Flow even further, complaining in court documents filed in April last year that the Canadians had failed to fulfil their end of the payment commitment for the buy-out of his three cable companies.

Paddick was not specifically asked to comment on this court case, but said that “I would characterise the early resistance to our strategy as growing pains”.

That perspective is understandable, given some of the huge financial challenges that would have preoccupied the minds of Paddick and his backers.

“The largest hurdle we faced was accessing the capital markets to raise the funding necessary to build our network in a timely and efficient manner,” he lets on. “These were tough times in Jamaica as the currency devalued and there were myriad macro-environment issues facing not only Jamaica, but, in fact, the world.”

Paddick and his partners were able to breathe a sigh of relief after they narrowly snatched a US$100-million financing deal in April 2008.

“Another week later and we would not have been able to raise the funds necessary to continue the build,” he points out, in explaining just how close they had come to a possible shutdown of the project. “I felt a bit like Indiana Jones running across the bridge as it crumbled behind him… but luckily for Flow and its 550-plus employees in Jamaica, we made it safely to the other side.”

In November 2009, Columbus issued US$450 million in bonds, the largest inaugural private offering in the region’s history. It used the funds to pay off all its bank debt. The owners revisited the bond market in May 2010, raising another US$200 million to “fully fund Columbus’s growth initiatives and network deployments in the region”.

This hard-nosed entrepreneur and his shareholders are not without a charitable side. English says that in 2009 the company spent $80 million on charitable causes — ranging from sports, to health, culture and education. She estimates that since operations began, and up 2010, Flow has given away to $300 million as part of its commitment to good corporate citizenship.

“We have installed free Internet in high schools to help boost their educational programmes,” says English. “We recognise that as a society we need to focus on education and its potential social impact.”

At the last count, there were 78 schools on the list of beneficiaries.

For all of Flow’s success in Jamaica, Paddick, an introspective team leader, remains modest in his outlook for the future role of this telecommunications company as an agent of technological and economic change.

“There is not a day that goes by,” he says, “that I don’t get asked ‘who is going to win the broadband war?’ Is it cable modems, DSL, WiMax, Fibre-to-the-Home, Satellite, Google TV, 3G, 4G, LTE or something nobody has even dreamed of yet.”

His is a perspective that underscores years of reflection, and an appreciation of not only the known unknowns for which this industry is so notorious, but what former US secretary of defence Donald Rumsfeld famously termed, ‘the unknown unknowns’.

“I will give you the same answer that I preach religiously to Columbus’s 1,800 employees,” says Paddick. “Our job is not to gaze into the crystal ball and figure out or develop the next killer app… our job is not to pick the winners and losers in the broadband war… our job is not to dictate to consumers how they should source their entertainment or information… our job is to provide the highest level of customer service possible and to relentlessly invest in and deploy technologically superior networks in each of the markets in which we operate to ensure that our customers can enjoy and benefit from whatever comes next.

“Everyday I remind everyone at Flow, our shareholders and our financial sponsors, of Columbus’s one golden rule… ‘Don’t Predict the Future, Enable it!'”

Moses Jackson is the co-founder of the Business Leader Award programme, the founding and former editor of the Business Observer, and a member of the Business Leader Award Selection Committee. He may be reached at moseshbsjackson@yahoo.com.