Claro bids for stronger position in mobile

Mark Titus, Business Reporter

Claro Jamaica, the most recent entrant in the dynamic and highly competitive mobile telecoms market, has set its sights on growing market share by another 20 per cent this year.

To this end, the firm, which is ultimately owned by Mexican billionaire Carlos Slim Helu's America Movil (AMX), is seeking to buy more spectrum space from the Government and throw up another 100 cellular towers to extend its network reach in Jamaica.

Its bid for bandwidth, now before the state-run Spectrum Management Authority (SMA), Claro said, is intended to penetrate some of the more inaccessible areas and increase capacity in some of the more densely populated communities it now serves, including Portmore, Spanish Town and Mandeville.

The company has a tower-sharing deal with rival telecoms provider, LIME, but, with 500 transmission towers across the country, is still in its roll-out phase.

"Our plans for this year call for a one-fifth increase in the size of our network in terms of the number of towers," said Colin Webster, Claro's information technology director.

"We are now at the point where we are out of capacity in certain zones so we are buying more from the Government to expand more phone calls and data sessions on the network."

Citing what it said was its obligation to client confidentiality under the Telecommunications Act, acting managing director of SMA, Deborah Newland, said in an email to the Financial Gleaner that her agency could not divulge specifics of applications.

Newland said, however, that SMA was able to accept applications on a first-come, first-served basis for the remaining spectrum on the 2.5GHz and 3.5GHz band.

She said the fees varied, depending on the amount of spectrum required, the assessed market value of the frequency band and the purpose - commercial or non-commercial - to which it would be put.

400,000 customers

Claro entered the domestic market in August 2007 with its parent company AMX acquiring Oceanic Digital Jamaica, which operated the MiPhone brand here, and the latest entrant now puts its customer base at 400,000.

There is no independent verification of subscriber numbers, but Claro's claim places it at number three behind Digicel Jamaica's tout of two million customers, and LIME Jamaica's estimated 700,000.

"Churning numbers is a real thing in our business," Webster said.

The Claro spokesman said the company's count is in relation to active customers and not simply persons who purchase a SIM card.

"If your SIM is not used in 90 days, we don't count you in our numbers, and that is what makes the difference."

"We base our count on our 90-day number and we have methods of measuring active customers within our network," the Claro executive said.

Pricing is among the arenas in which the battle among the mobile telecoms firms for customers and revenues has been waged in Jamaica, which is considered to be a lucrative mobile market.

A recent cross-rate agreement with it competitors saw Claro providing its customers with internetwork calls at J$7 per minute to LIME and Flow Jamaica numbers and J$12 per minute to Digicel.

The normal per-minute connection charge between Claro phones and Digicel numbers is J$17.70.

"One of the reasons we cannot drop our prices even a bit lower is that most of the money we charge goes to the competitor, because they refuse to drop their interconnectivity rates to us," Claro's Marketing Manager Joseph Oates said, referring to one of the many controversial issues between the companies.

number portability

Oates is looking to mobile-number portability to remove what he said are disadvantages now borne by mobile users.

It's encouraging, he said, that a feasibility study and cost-benefit analysis of the move are now being conducted by telecoms regulator, the Office of Utilities Regulation (OUR).

"Presently, the customers are locked in, because in some cases your number becomes your identity, so it can be difficult to change service provider."

Investment in innovation and marketing is among the strategies being employed by Claro as the firm fights its way it has said, to the top spot.

"Jamaica is a huge telecoms market. We are investing heavily in this country and our progress, to date, encourages further investments," Oates said.

Claro's main store in New Kingston was recently renovated at a cost of J$18 million and is to be the template for all seven Claro main stores nationwide, with its outlet in May Pen, Clarendon, said to be next in line for a facelift.

Claro said it spent US$300 million transforming the network it bought from Centennial to 3G, the latest mobile technology on the market.

Previous reports had put the build-out at US$270 million.

Webster said his firm is not worried by rival Digicel's planned introduction of an even more modern 4G WiMax platform due for roll-out by June.

"3G is a priority for expansion because the data network is at a choke point right now, but our decision not to get into WiMax was deliberate," Webster said.

"What we are looking at after 3G is more of a 5-generation technology."

Claro is the largest mobile phone network in the Americas, with around 160 million customers.

It was reported last Friday that AMX added 5.5 million new customers in the first quarter of 2010.

Its Brazilian operations led the subscriber growth, adding 1.2 million customers, or 9.8 per cent from a year earlier, taking AMX's base to 206.4 million.

mark.titus @gleanerjm.com