Last week, authorities on the Cayman Islands granted nine licenses for telecom services in the local market. Among the firms that accessed a license, there are Digicel, AT&T Wireless, and Cellular One. The entrance of competition puts and end to Cable & Wireless (C&W) 40-year monopoly.

Deregulation in the country, set to April 2004, is part of the consolidation process started in the Caribbean, that starts showing results along the 2H of the year. Though C&W¿s leadership is still kept, ups and downs as regards rules, interconnection, and formal launching of competitors have been left behind, and the incumbent already starts registering the impact of the new setting.

C&W dominance in the region is a conflict trigger for AT&T Wireless and Digicel, mainly in the mobile telephony segment. The US firm present in Barbados, Dominica, St. Lucia and St. Vincent, also tried to expand coverage in St. Maarten after buying Telcell, cell unit of the State-run TelEm, but the offer was rejected.

In turn, Digicel confirmed entrance in Grenada will be completed by October. The firm already operates in St. Vincent, St. Lucia, Aruba, and Jamaica, where it captured 700,000 mobile users, thus displacing C&W from leadership, with 600,000 users. In Grenada, the Irish firm closed an interconnection deal with the British company in July, that also implies the end of the 40-year monopoly.

Debates on interconnection still dominate the scene in Barbados. After Digicel accused C&W of failing to comply with the interconnection agreement, and blocked international calls where the British firm still holds its monopoly, the Government decided to intervene.  C&W had to file a report on the offer of access charges before the Fair Trading Commission (FTC). Before year-end, the body will assess the document together with AT&T Wireless, Digicel, and Sunbeach

With the arrival of competition, cell penetration in the Minor Antilles went over 50% along the 1H 2003. However, several analysts point the upbeat setting has to do with delays in the region to implement opening, and that in less than a year, enthusiasm for competition will be over, given saturation in the market and the beginning of a new phase of geographic, technological, and service consolidation.

Nonetheless, market liberalization does not only comprise mobile telephony, and forces Cable & Wireless to two fold efforts not to lose terrain in the Caribbean, where turnover reached US$ 1.4 billion in 2002. To face new competitors, C&W is adjusting the launching of a new network GSM/GPRS provided by Nortel, that not only allows data transmission, but also renders higher income for roaming, specially coming from tourists. Besides, C&W entered Martinique and Guadalupe with long distance, Internet access and virtual private networks, thus putting an end to the monopoly of France Telecom.

In fixed telephony, it implemented rate re-adjustments, with drops of up to 60% in the international communications costs in Jamaica, Barbados, St. Lucia and, recently, in Dominica. C&W counts on stakes in the operators in Dominica (80%), Grenada (70%), St. Kitts (65%) and Trinidad and Tobago (49%). But operations could not reach Bahamas, where BahamasTel – consortium created by the banks JP Morgan and Citicorp –was awarded the tender for 49% of the State-run Batelco, this week.