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3/31/03

Economics in Action

We have been experiencing history in the making here over the last several months. This is the situation: Cable and Wireless is a monopoly that controls all land phones, cellular phones, cable TV and internet services on the island. For all those who long for the simple days of Ma Bell, let me tell you. The billing is simple. You get one bill that covers all these things. And there are no advertisers calling or yammering away on TV about how you should switch to their plan. But their abuse of the unsuspecting public is horrendous. Deb had about $100 of mysterious charges on her phone bill several months ago. Not only would they not tell her what things meant or why she was being charged, but they wanted to charge her $5 per page for an itemized bill. Every so often, C&W will put their heads together with the government and completely change the pricing schemes and rates for phone calls. One of these went into effect in August and made it so that it costs $.75 per minute to call from a land phone to a cell phone, compared to $.08 from land to land phone.

But last fall the government approved a new cell phone company to move into the island. They have had a million and one obstacles and hoops to jump through given from C&W. It was important to get all of these agreements so that the new Digicel phones could call C&W phones, and so that Digicel could use some of the existing infrastructure. This was an ugly back-and-forth where C&W kept changing their rules and rates. All of it was played out in the papers, on the news and with smear ad campaigns. But it was pretty obvious that if there was some trouble with these agreements, the onus was on C&W since they were the ones currently in possession of the equipment and whatnot. In response to the pending partial break-up of the monopoly, C&W stuck it to us all by doubling the rates for the fixed-line phones. So now I have a lovely monthly charge of over $30 just to RENT the damn PHONE.

Anyways, last Monday the whole Digicel thing launched. They had quite a media blitz. New billboards went up everywhere, caravans of cars playing loud music and with people hanging out of them went up and down the roads, girls decked out in short and tight Digicel wear were at every intersection handing out fliers and there were different parties throughout the week. It wasn’t several hours into Monday before I started to see people with the new (and better!) phones. Their rates are lower than C&W, and the overseas rates are better even than from the C&W fixed line.

But this weekend, in response to the large number of people jumping off the C&W bandwagon, C&W lowered all their rates to just below the Digicel ones. Ha! Competition! I am resisting the lure of a cool new phone (compared to the crappy factory seconds ones that C&W sells for top dollar) until the competition thing hits rock bottom. Not to mention that I don’t use my phone all that often.

So, it’s amusing to sit on the sidelines for the whole thing.