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Caribbean telecom update
Global Telephony / June 1996

By Larry Luxner

This year, telecommunications networks in two of the Caribbean's most populated, yet least-developed nations -- Cuba and Haiti -- are getting badly needed upgrades, while huge investments in telephone-saturated Puerto Rico are opening the way for intra-island long-distance and PCS competition.

Since 1962, Washington's trade embargo against the Castro regime has prevented U.S. investment in Cuban telecom ventures, with such investment even more unlikely since passage of the more restrictive Helms-Burton law in March. Nevertheless, that hasn't stopped some adventurous European and Latin investors from moving in.

Earlier this year, a group of Italian executives and the Cuban government formed Cubatel S.A., the first-ever venture to produce telecom equipment in the Communist nation. Company president Nelson Ferrer says Cubatel will not only seek to meet domestic demand for phone equipment, but will also market products to nearby Caribbean and Latin American countries.Italy's Stet already has a 12% share of Cuba's $1.5 billion national long-distance phone venture Etecsa (Mexico's Grupo Domos has 37% and the Cuban government 51%).

Meanwhile, Brazil's Telebras -- in cooperation with Etecsa, which recently published Cuba's first new telephone directories in 20 years -- has begun operating 30 public phones in Havana that accept pre-paid cards instead of coins. Telebras says the two firms should sign a major contract by year's end.

If the phone situation is bad in Cuba, it's even worse in Haiti, where the phone density is about 0.5 per 100 -- the lowest in the Western Hemisphere, and about the level found in many sub-Saharan African nations. In February, Northern Telecom signed a $14 million contract with state-owned Teleco to provide a DMS-300 and DMS-100/200 switch-ing system. The DMS-300 will be installed in Port-au-Prince as an international gateway with a capacity of 10,000 trunks. The DMS-100/200, meanwhile, is equipped with 60 operator positions as a local tandem switching system to serve 45,000 lines in the Pétion-ville area. The existing DMS-10, purchased in October 1995, is serving 7,000 lines in Cap-Haitiën. With the present contract, Nortel's switching equipment will add 62,000 lines to Haiti's telecom infrastructure.

Teleco itself is to be privatized, under a controversial plan announced Mar. 17 by the new Haitian president, René Preval. "It takes Teleco one month to come and solve a telephone problem in your home," complained Preval. "You can be asking for a telephone for one year and they won't give it to you."

In the English-speaking Caribbean, the two most important markets are Trinidad & Tobago (population 1.3 million) and Jamaica (population 2.4 million). The Trinidadian government is currently mulling over a new telecom policy that would open the local market to at least one additional full-service provider, giving competition to the state-owned Textel, of which Cable & Wireless Ltd. is a minority partner.

The U.S. Embassy in Port of Spain says Trinidad's greatest need is for high-speed data lines, digital communications and additional cellular data transfer capability to serve businesses. "However," says an embassy spokesman, "government may not be inclined to allow companies to only provide partial service, such as long-distance or cellular. Officials are worried that if partial services are permitted, companies would only get into these more profitable services, and little or no investment would go toward less profitable sectors such as improving service to rural customers."

Telecommunications of Jamaica (TOJ), meanwhile, says it has installed 206,000 new phone lines in the last six years, making a total of 295,000 lines available. TOJ President Errald Miller says that by 2000, Jamaica -- thanks to investments of J$34 billion ($850 million) should have half a million lines in service, including 400 rural districts with currently have no phone service at all. TOJ, a private monopoly and part of the C&W group, plans to introduce digital cellular and videoconferencing facilities by early 1997.

At the same time, TOJ and C&W plan to install a fiberoptic cable system linking Jamaica, Grand Cayman and Cayman Brac. The $28.3 million Cayman-Jamaica Fibre System will be able to handle 30,000 calls simultaneously, and will also support internatio-nal banking and financial services, medical imaging, cable TV and distance learning. Alcatel Submarine Networks has been awarded the contract to supply and install the 870-kilometer system, which should completed by August, with commercial service beginning in October.

Cellular operations are also coming to the smaller islands of the Eastern Caribbean in the form of Boatphone, a C&W subsidiary. Comsat RIS Plexsys Wireless Systems, under a contract signed in mid-April, will supply Boatphone with its new P-series equipment, to be deployed in Antigua, St. Lucia, St. Vincent, Montserrat and Dominica in order to provide "seamless roaming" throughout those islands and will be ready for service by Aug. 30. Earmarked for later deployment are the islands of St. Kitts and Grenada.

Another fiberoptic cable is being built between Puerto Rico and the Dominican Republic as a joint venture between AT&T, Puerto Rico's Telefónica Larga Distancia and two Dominican companies -- GTE Codetel and Tricom. The $30 million cable, dubbed Antillas One, will be commissioned within a year and will be able to carry 15,000 calls simultaneously.

In Puerto Rico, where 1 million conventional phone lines are already in service, stateside companies such as AT&T, MCI and Sprint are lining up to compete against government-owned Puerto Rico Telephone Co. (PRTC) to carry intra-island calls, follow-ing PRTC's unsuccessful attempts to stave off competition. Meanwhile, the cellular market is heating up. Earlier this year, PRTC -- which competes against Cellular One and others --put Ericsson's digital D-AMPS cellular network into service. The $10 million system has a capacity of about 10,000 subscribers, and is expected to grow rapidly.

Puerto Rico, a U.S. commonwealth with a per-capita income of around $7,500, is also where PCS will make its landfall in the Caribbean. Last year, Centennial Cellular paid $54 million for the B-band license to operate PCS there; after winning the license, it awarded AT&T Network Systems a $50 million contract to build the network using code-division multiple access technology. Over the next three years, according to published reports, Centennial will invest $75 million in the network, which will initially serve 50,000 subscribers but can be expanded to serve up to 200,000 subscribers.

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