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Barbados: E-Commerce

Telecommunications

In October 2001, the Barbados government commenced the liberalisation of the telecoms market. Barbados' telecoms service provider, Cable & Wireless, agreed to a memorandum of understanding under which the government replaced C&W's license with a non-exclusive one thus paving the way for new competitors to develop in the industry.

The first phase of liberalisation, ending on November 30, 2002, focused initially on the introduction of VSAT-based bi-directional call centre operators and new mobile operators. The second phase - from December 1, 2002 to July 30, 2003 - dealt with domestic services, and private international long distance service providers were able to begin operations after August 1, 2003.

The issuance of licenses is under the joint remit of Barbados' Telecoms Regulating body and the Fair Trading Commission operating within the Trade and Industry Ministry.

Cable and Wireless came in for criticism, however, in October, 2002, when Sunbeach, Barbados' largest ISP, accused C & W of supporting its own internet subsidiary to such an extent that unfair pricing practices are able to take place. As the jurisdiction's telecommunications sector has not yet been fully liberalised, C&W currently enjoys a monopoly position, which means that ISPs such as Sunbeach must purchase services from the company, whilst competing with its local internet arm, Caribsurf. Sunbeach CEO, Chris Alleyne, accused C&W's local operation of deliberately undercutting offers made by Sunbeach with bids that bear little resemblance to the true cost of providing the services in question.

"Through some strange mechanism, their pricing structure is now so flexible there is virtually no limit to how low they can go with their offers," Sunbeach's CEO explained. An un-named government telecommunications adviser told the local newspaper that although Caribsurf's actions are not illegal, it would appear that Cable & Wireless are "deliberately pricing so low as to drive the competition into retreat or out of the market ahead of liberalisation."

The government's timetable was not achieved, and Phase III of liberalisation was not in place until 2005.

Some progress had been made in terms of the issue of mobile licences when requests for proposals for cellular licences were issued in November 2002. Applications were received from one local company, Sunbeach Communications Inc., and international players AT&T, trading as Wireless Ventures Barbados Ltd, Digicel Barbados Ltd., TWT Barbados SRL and Third Generation Wireless Barbados Ltd. Ultimately, three participants were chosen to compete: Sunbeach, AT&T and Digicel. Each of these was granted a licence, based on their unique strengths. A key determinant was the percentage of local ownership of each entity. Sunbeach was a particularly strong runner, due to its local majority ownership and the fact that it is publicly traded on the Barbados Stock Exchange, which allows for current ownership by the public at large.

In early August 2003, the cellular licences that were granted in March 2003 were finally issued. This lag time provided the three new cellular telecom providers with the much-needed breathing space to build their networks prior to launch. Initial estimates indicate that between the three providers BDS154 million (US$77 million) was invested in the race to launch. This includes the purchase of the required telecommunications hardware for the installation of networks, acquisition and construction of cell sites and operating centres, staffing the operations with an estimated 300 persons over time, interconnection agreement with the incumbent and fellow competitors and intense marketing and promotion efforts.

A new high-speed telecommunications service was launched in mid-2006 by TeleBarbados Inc. which promised to bring more competition to the island's telecoms sector and the wider Caribbean region. TeleBarbados's $70 million investment aimed to provide long distance service, international private line and data service, fixed wireless internet and local exchange telephone services.

"We have invested in building a submarine cable system; this ensures our complete independence from Cable & Wireless and ensures us longevity in the market here," Mike DeGraw, TeleBarbados' director of sales and marketing, explained at the launch ceremony. Mr DeGraw said that consequently, the investment would help to bring "true competition" to the sector.

TeleBarbados is serviced by a 940-kilometre, 20-gigabit submarine fibre-optic cable.The service was initially offered only to corporate customers, but the company planned to start offering residential high-speed Internet access and VoIP for international calling by the end of 2006, and to the entire island by the end of 2007.

In January 2007, Fidelity Wireless revealed plans to offer Internet, phone and IPTV/Video on demand services (so called 'triple play') over a new state of the art wireless broadband network to the residential and business community in Barbados. Fidelity has commenced the construction of a new nationwide ‘WIMAX’ wireless broadband network, and the service was due to commence in Barbados in the second quarter 2007. The company has based its regional operational headquarters in Barbados, where it is locating its back office support and network operations centre.

WIMAX is the new worldwide standard for wireless broadband Internet technology. Fidelity, together with its technology partners, said that it has developed an advanced solution for the delivery of multimedia services over Wimax, and the Barbados network will be the first deployment of its kind in the Caribbean.

In February 2007, Global Crossing, the global IP solutions provider, announced that it was working with Global Caribbean Network (GCN), a subsea cable operator headquartered in Guadeloupe, in the French West Indies, to enhance global IP connectivity to the Caribbean region. Under the terms of several agreements, GCN is connecting its voice and data traffic services arriving from the Caribbean to Global Crossing's IP network in St. Croix, via 10-Gigabit wavelengths, enabling GCN to extend its services to North America, Europe and Asia. Primarily based in the Caribbean, GCN's customers would give access to Global Crossing's state-of-the-art global network, so that they can connect to any of the 600 cities in 60 countries where Global Crossing delivers services.

According to a 2006 Telecommunications Industry Review study, the Caribbean is one of the fastest growing broadband markets in the world.

 

 

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