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After years of aborted attempts at liberalization of the country’s telecommunications market, Trinidad and Tobago will finally welcome two new mobile operators in April 2006: Regional high-flyer Digicel and local consortium Laqtel. They will join incumbent Telecommunications Services of Trinidad and Tobago (TSTT) in what figures to be an intense competition for subscribers in one of the Caribbean’s wealthiest and largest economies.
At first glance, numerous similarities exist between Jamaica in 2001 and Trinidad and Tobago in 2006. Both are large, populous Caribbean nations where Cable and Wireless has enjoyed a monopoly over mobile services for years. Digicel will be the main challenger in Trinidad and Tobago, as it was in Jamaica, while a smaller, local operator will be the third entrant; Jamaica’s Oceanic and Trinidad and Tobago’s Laqtel could play analogous roles.
Cable and Wireless, a 49 percent owner of TSTT, has worked to ensure that the similarities end there; it needs to avoid a Jamaica-like scenario in Trinidad and Tobago at all costs. Digicel completely blindsided the incumbent in Jamaica, capturing a majority market share in less than a year and holding it to the present day. TSTT faces challenges other than intense competition, however. Its GSM coverage is notoriously spotty, with a high percentage of dropped calls and complaints about poor reception. As the country’s telecommunications incumbent, it also has a branding problem; its “coolness” factor is low, customers consider it less innovative, and some harbor resentment toward the company due to years of monopolistic practices.
Overall, TSTT has generally been more aggressive in its marketing offers and has shown increased responsiveness to its competitors’ moves. TSTT was quick to announce a partnership with Research-in-Motion to offer Blackberry services, for example, doing so soon after Digicel’s own announcement. It has encouraged subscribers to sign up for two-year post-paid plans by offering a “two-for-one” promotion. Additionally, its planned deployment of an EVDO fixed wireless network is a clear response to Laqtel’s own 3G deployment. At the Caribbean level, Cable and Wireless is starting to demonstrate an increasing willingness to be more proactive and competitive. Nonetheless, the company has not yet dispelled a perception of execution risk. We expect the challengers to capture roughly 40 percent of total market share.
No Jamaica, but TSTT Will Face Strong Competition
While TSTT’s work and ability to buy time so far will prevent a Jamaica-like debacle, we still expect strong competition in the country’s mobile market. Mobile users in the islands will be the main beneficiaries, as competition drives subscription prices down and increases access to digital technologies. Pyramid Research also expects the corporate sector, particularly the country’s main economic engine—the oil industry, to be especially important to the three operators. TSTT has already developed a solution for this vertical market segment, and its government connections could prove valuable in winning clients. Nonetheless, new contracts could provide a boost to the challengers, so competition will be fierce.
Purchase the latest Americas Perspective for additional analysis of TSTT’s efforts, Digicel’s and Laqtel’s market entry strategy, and subscriber/market share information online.
For additional information about Pyramid Research’s Trinidad and Tobago mobile market coverage, please email sales@pyr.com.
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