In a significant show of support for Rodney Davis and his efforts to claw back market share in Jamaica, the parent company of Cable & Wireless Jamaica flew its top executives to Kingston this week for meetings of the boards of both Cable & Wireless plc and its relatively new Cable & Wireless International division.

"The fact that the Cable & Wireless board, for the first time since 1999, is meeting outside of the U.K. and in Jamaica is a very clear signal that we mean business," said C&W chairman Lord Robertson at a press briefing Wednesday.

Not long ago most of the businesses in the 33 countries that C&W International operates in were monopolies and Cable & Wireless, the British-based company that provided telecommunications services in the colonies enjoyed an easy, untroubled existence.

But all that has changed in recent years, with liberalisation in the markets, starting with Jamaica at the beginning of the decade. Only in the tiny European city state of Monaco where C&W still retains a monopoly.

LOST MARKET SHARE
In the face of competition, C& W lost market share and in Jamaica particularly, where the feisty mobile provider, Digicel launched its foray into the Caribbean, the decline was stark. In the past five years, Cable & Wireless had no fewer than four CEO's, with Davis, on the job for less than two years, being the latest. And recently, there were rumours that the he too was on his way out.

But Harris Jones, the head of Cable & Wireless International Ñ one of two autonomous business units created a year ago when Cable & Wireless reorganised itself a year ago Ñ dismissed the suggestion.

"We have confidence in Rodney and the job he his doing," Jones told the Financial Gleaner. "That is a rumour that apparently started a few months ago, and normally I would not comment on it. If it would help to clarify the issue, then I am willing to be quoted."

The performance of Cable & Wireless under Davis, perhaps merits the vote of confidence. He has spiffed up the management and has attempted to match the the competition with innovative services.

In report to shareholders for the six months to the end of last September, Cable & Wireless Plc was telling shareholders of a 64 per cent growth in Jamaica in its GSM customers -both in new business and cross-over from TDMA, according to Jones. Additionally, Jamaica had tripled, over the past 12 months, its Internet broadband customers, and through the introduction of a pre-paid service had halted the migration from fixed telephony.

The performance has been showing in Cable & Wireless Jamaica's bottom line, where six-month profit at J$888.1 million, through marginally lower than a year ago, suggested a resurgence after recent declines.

Things have also been changing elsewhere. C&W International has seen falling revenue since the start of the decade, with the situation apparently stabilising in 2004/2005 under Jones' watch.

TURNAROUND KEY
As the second largest country by population in their portfolio, and the largest in the Caribbean -where Cable & Wireless claims market leadership in 10 of the 14 countries where they operate, a turnaround in Jamaica is clearly of key importance to the UK telecoms.

Jones told reporters Wednesday that the visit by the C&W brass from London to Jamaica "will enable us to gain a broader understanding of what Rodney and his team have achieved..hear first hand their ambitious plans for Cable & Wireless Jamaica; and to experience the unique culture and diversity of Jamaica for ourselves".

Jones described himself as committed to the Caribbean, where C&W has invested US$650 million in the last three years, and were rapidly increasing their local talent, with only 15 expatriates in senior management positions as opposed to 100 two years ago.

Jones announced that C&W would be investing $5 billion next year as part of their aim to be "first choice for customers". Most of this money will go towards upgrading mobile and voice over internet protocol (VoIP) telephone and broadband services.

Describing the mobile GSM service as world class, he said C&W customers have grown 273 per cent in the two years to last September Ñ predicting that they would have two million Caribbean customers by the end of this financial year in MarchÑ and that usage measured in minutes had doubled in the past year. He also described C&W as on "the leading edge of broadband deployment in the region" with a 600 per cent increase in the two years to last September, and "five of 13 countries having broadband penetration greater than the USA and UK."

In the company's six months to September 30, 2006 total Caribbean revenue stood at £289 million with 690,000 fixed line, 126,000 broadband and 935,000 mobile customers.

In an interview with the U.K's Financial Times last year, Mr. Jones had then described Jamaica as providing some "painful lessons" and that "In the markets that have liberalised since Jamaica we have been much more robust in terms of our retention of market leadership."

Davis described "2006 as the year of the highest competition in its history", giving as example the 60 per cent to 70 per cent fall in pricing for Jamaican big business accounts.

Nevertheless, despite this implied reference to C&W's competitor Digicel, as well as market concerns over cable operator Flow, he said revenues from mobile and broadband to September were up a sharp 38 per cent and 78% respectively, driving overall revenue growth of around 10 per cent.

Davis also claimed a 20 per cent increase in C&WJ's mobile subscriber base and said revenue performance had been driven by hugely increased usage.

Despite emerging broadband competition, he estimated C&WJ as having the majority of the market in this segment with about 10 per cent out of total penetration of 17 per cent.

According to Jones, Cable and Wireless' success in Jamaica was extremely important to C&W's overall strategy as "precondition to making acquisitions in the UK", saying it demonstrated to shareholders that the company was a good steward of its resources.

keithcollister@cwjamaica.com

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