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Telecom firms are pursuing opportunities in Caribbean
Development Business / August 16, 1996

By Larry Luxner

BERMUDA: In May, AT&T announced it would build a $45 million fiberoptic cable between the U.S. East Coast and Bermuda, a wealthy tax haven boasting the Western Hemisphere's highest teledensity (73.9 lines per 100 people). The 1,310-km cable will be owned by TeleBermuda International Ltd.

CUBA: Burdened with the lowest teledensity in Spanish-speaking Latin America, Cuba nevertheless is making badly needed improvements in its phone system. Earlier this year, Italian investors and the Cuban government formed Cubatel S.A., the first foreign venture to produce telecom equipment here since the 1959 revolution. According to company president Nelson Ferrer, Cubatel will not only seek to meet domestic demand for phone equpment, but will also market products to nearby countries.

Italy's Stet already has a 12% share of Cuba's $1.5 billion national long-distance phone venture, Etecsa (51% owned by the government). Mexico's Grupo Domos, which has the remaining 37% share, is being pressured to pull out of Cuba by Washington, whose new Helms-Burton law aims to punish foreign firms that trade with the Castro regime. Meanwhile, Brazil's Telebrás has installed 30 public phones in Havana that accept prepaid cards, and the Cuban government has issued Decree 209, which intends "to encourage Cuba's full access to Internet services, while at the same time safeguarding national security and defense interests."

GUYANA: In 1991, Virgin Islands-based Atlantic Tele-Network Inc. paid $16.5 million for an 80% share in Guyana Telephone & Telegraph. Since then, the number of access lines in South America's only English-speaking nation has skyrocketed from 17,500 to 60,000. International circuits have more than doubled, and cellular service has been introduced in Georgetown, the capital. Yet the overwhelming majority of GT&T's $131.2 million in 1995 revenues came from audiotext -- also known as "dial-a-porn" because of the technology's domination by phone-sex services. Last year, the FCC cited Guyana as "one of the worst offenders" of dial-a-porn.

HAITI: The poorest nation in the Western Hemisphere, Haiti also has its lowest teledensity -- about 0.8 per 100 inhabitants. In February, Northern Telecom signed a $14 million contract with government-owned Teleco to provide a DMS-300 and a DMS-100/200 switching system in Port-au-Prince and Pétionville; together, the two switches will add 62,000 telephone lines to the national grid. Haiti's new president, René Préval, wants to privatize Teleco -- the only state entity making money -- though the plan is unlikely to succeed given fierce labor opposition.

JAMAICA: Telecommunications of Jamaica, a private monopoly and part of Cable & Wireless Ltd., has installed 206,000 new lines in the past six years, making a total of 295,000 lines available in this island nation of 2.4 million. By 2000, Jamaica should have half a million lines in service, including 400 rural districts that currently have no service, says TOJ President Errald Miller, whose company will invest $850 million over the next four years.

TOJ also plans to introduce digital cellular and videoconferencing by early 1997. Meanwhile, the Jamaican government plans to build a $20 million digiport center at Portmore, just outside Kingston. The 164,000-sq-foot project aims to lure foreign investors active in telemarketing, CD-ROM archiving, document management and other Internet-related functions.

SURINAME: Telesur, a 100% state-owned company, operates all local and long-distance service in Suriname, a former Dutch colony that gained independence in 1975. Although President Ronald Venetiaan, who was re-elected in May, favors economic reform, his government has no immediate or long-term plans to privatize Telesur.

TRINIDAD & TOBAGO: Likewise, no plans are afoot to sell off state-owned TSTT, of which Cable & Wireless Ltd. is already a minority partner, though the govern-ment is considering a telecom policy that would add at least one full-service provider to the local market, in competition with TSTT. At the moment, Trinidad's greatest need is for high-speed data lines, digital communications and additional cellular data-transfer capability to serve businesses.

"However," says an official at the U.S. Embasy in Port of Spain, "the government may not be inclined to allow companies to only provide partial service, such as long-distance or cellular." If that happens, officials worry, "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."

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