News that former Prime Minister Andrew Holness decided to reverse his predecessor Bruce Golding’s decision to approve Digicel’s acquisition of Claro on the proviso that Dicicel run two separate networks, has stoked the flames of a towering inferno that has seen vigorous debate on this contentious subject.

Earlier this week the CEO of Digicel Jamaica Mark Linehan sought to set the record straight and outlined the value proposition this deal will bring to Jamaican telephone users. of what the acquisition of Claro will now mean for the country. Speaking with Caribbean Business Report from Digicel Jamaica’s corporate offices in New Kingston Linehan said: ” If you look at the customers needs today as opposed to 11 years ago when we launched in Jamaica, they have radically changed. They have become more sophisticated and are demanding more from the network provider. There is a voracious appetite for data and the speed of accessing information. Therefore the next step was to provide faster data access. We have seen our revenues from data grow at an incredible rate month on month for the last 24 months. So the next question was, how do we deliver on the needs of our customers.” ” One could clearly see that Claro was struggling and that they didn’t gain the traction they thought they might when they initially came into the market. Claro’s business model was not sustainable and they eventually decided to sell. We saw an opportunity to inherit their spectrum which they didn’t utilise to the full benefit of consumers. with that 850 spectrum we can now roll out an islandwide 4G mobile telephone network.”

Over the last 11 years Digicel has seen the evolution of GSM, 3G and 4G. Linehan says that with 4G customers will see data speeds up to 7 times faster than legacy 3G. This cutting edge technology will cover initially about 80 per cent of the country.

“This would not be possible without Digicel’s acquisition of Claro. This is an investment of an additional US$30 million on top of a total investment of US$1 billion in Jamaica to date. The Claro acquisition now allows us to better deliver on the needs of our customers. In concluding this deal we brought to the government a number of proposals we felt we could deliver on. The first was to offer to roll out a state-of-the-art 4G network. The second was to relinquish spectrum back to the government which they can now auction. We also offered to reduce cross network rates and we committed to that. From the 4th of January it will cost Digicel customers less to call cross-network. That equates to J$3.50 less peek and $2.00 less off-peak which spells a 20 per cent reduction in cross-network rates. Already we are getting a lot of positive feedback on this move. We will also be working with the government to bring wireless broadband access to schools and post offices in remote parts of Jamaica. Now none of this could have taken place without the acquisition of Claro by Digicel,” said Linehan.

Dicicel has become the pre-eminent corporate citizen in Jamaica. He has rebuilt the Coronation market, located its world headquarters in downtown Kingston, being the leading sponsor of media events, made invaluable contributions to educational initiatives and has answered the call when the country has been bedeviled by hurricanes and other acts of god. In order to continue to be a partner of Jamaica and help the country in times of need it has to look to its revenues and this entails finding the best value propositions for customers.

“Ten years ago we broke the monopoly when customers just wanted access to a mobile phone at an affordable rate. We changed the landscape forever and customers flocked to us. Today customers are still using voice but they are increasingly demanding better data offerings. With a more sophisticated customer we have to deliver on the technology,” said the Digicel Jamaica CEO.

4G will allow Jamaicans faster access to downloads, files, video and music on their handsets. Digicel will be employing HSPA+ technology. Current 3G capability handsets will be able to utilise the HSPA+ technology.

There are those who say that Digicel colluded with the last government to renege on Golding’s decision that Dicicel should operate two separate networks. Linehan took the opportunity to dispel those misconceptions.

” The approval issued by former Prime Minister Bruce Golding was never accepted by Digicel. When we first received the approval we made it unequivocally clear that it was unacceptable to us because operating two separate entities was unrealistic. We conveyed that to the Prime Minister but then in a short space of time there was a change of Prime Minster. We continued our deliberations and discussions as part of the overall process. Our main motivation was to acquire Claro and inherit its spectrum to bring the best technology to consumers. Golding’s initial approval terms were both economically and legally impractical. It just didn’t make sense. Any conditions would have been unlawful under the Telecommunications Act. We went to Holness, and he listened to them and understood them so too did the Opposition Spokesperson on Telecommunications Philip Paulwell. It then so happened that the administration changed and the new deal was not understandably given top priority. Come to think of it we have had three prime ministers in three months. There has been many changes on the political landscape which didn’t help us. We first initiated discussions last March and they took an inordinately long time to get approval and when we did it was unworkable and so we didn’t accept it. We therefore had to go back to the table, go through the process until we could arrive at a mutually beneficial arrangement.”

Golding’s initial pronouncement would in effect mean that Digicel would be the parent of two separate and competing networks, a scenario that doesn’t exist anywhere in the world. Linehan also went on to dispel the claim that Digicel is not regulated maintaining that both mobile operators are indeed regulated.

“The OUR is in the process of determining the Mobile Reference Interconnection Offer (RIO) which will apply to all mobile operators. As part of this RIO a separate process has been kicked off in relation to determine mobile termination rates. As such the OUR is following due process and are regulating the mobile operators as per their mandate and in accordance with the Act.”

The Digicel boss pointed out that LIME is the only operator regulated in the fixed line business- a market where they have a market share in excess of 95 per cent.

“Everything Digicel has been able and are able to do in on the mobile phone business side, LIME has been able to do as well  (including setting retail rates from LIME fixed to LIME mobile). The current situation is a result of market forces.”