Telecoms providers battle with netbooks
Published:Friday | September 24, 2010 | 12:00 AM
Mark Titus, Business Reporter
With mobile giant Digicel sitting atop the local market with a seemingly impassable two million-plus subscriber base, netbook sales and Internet services have become the new frontier in the competition between the major players in the local telecommunications industry.
While trailing some months behind the rollout of the 3G technologies of bitter rivals LIME and Claro, the Dennis O'Brien-owned company, with the launch of its residential 4G WiMAX broadband service in August, is going after the 153,000 households that own personal computers but have no Internet access, and has sought to open a window for the dwellings without the device to own one.
This drive for not only Internet, but also PC penetration has resulted in the battle lines being drawn between the big three in particular.
Digicel was the first to publicly voice the idea to offer netbooks - the smaller versions of the regular laptops - with its 4G technology, but was beaten to the punch by Claro, who, during a period of aggressive, in-your-face marketing campaign, focused mainly at the market leader, introduced the Dell mini 10 netbooks in a package worth $49,999 in December last year.
Three-year contract
Back then, customers were asked to pay $6,000 at sign-up for the so-called '3,000-megabyte plan', which qualified them for a free netbook, plus one month free Internet once proof of income and address, and proper identification are provided. Subscribers also must commit to a three-year contract to pay a monthly fee of $3,000, which would entitle them to the 3,000 megabytes every 30 days.
Checks at the Claro store in Cross Roads on Wednesday revealed that the one-off cost for the netbook package was still the same, but the deposit now stood at $7,875 and monthly payment for a three-year period was now at $3,500 plus GCT.
It is easy for one to gravitate toward a new product from the Irish company, which was instrumental in loosening the monopolistic grip of telecommunications giant Cable and Wireless, some 10 years ago, through the sale of more affordable devices which saw them bagging 100,000 subscribers in the first 100 days.
A Digicel facility stands beside the Claro outlet, but unlike their competitor whose employees seemed to have little to do when the Financial Gleaner visited, the mobile giant's customer-care personnel had their hands full.
The company offers net books built by ZTE Corporation, the Chinese firm who constructed their WiMAX network.
A well-mannered sales agent at the store advised this reporter that the netbooks could only be obtained through bundled packages, which means one had to agree to purchase a modem device.
The sales clerk calculated the netbook, along with dongle, otherwise called the on-the-go modem, to cost $45,071, while the standard WIFI modem package had a price tag of $49,000.
If a consumer cannot make a one-off purchase, that customer has the option of getting financing through Courts, the National Commercial Bank (NCB) and credit unions across Jamaica, with whom Digicel has forged partnership, in order to make their purchases.
At the same time, LIME has created a payment plan for the consuming public, which it has had on offer since last year, Dwight Williams, internet product manager for LIME's 13 regional operations, claimed.
According to Williams, the netbooks now on the market are part of a long-term deal with Chinese manufacturer Lenova and is being sold at a cost of $32,500 plus GCT.
"This is one of the most compelling offers from any of the telecoms companies right now," he told Financial Gleaner, last week, "If a customer takes one of our 8mgs package, which costs $2,875 per month, they can get the netbook and pay over four months."
"This means that we will split that $32,500 into four monthly payments, which works out at $8,100 per month, with no interest," he added. "This is like an interest-free loan, even while another company is pushing you towards getting third-party financing at market rates from financial institutions."
The regular laptop and desktop are also available at $54,000 and $51,000, respectively, and Williams is confident that this deal with Lenova, who bought out the computing arm of IBM, will enhance the revenue of his company.
"We are in the business of giving our customer access to our business, which is providing Internet, and we believe that this does enhance our business," he said, when asked if the sale of netbooks impacted the company's revenue. "The more computers we get on the market is the more the customer will access our service."
But Digicel was not so direct when asked the same question, choosing rather to restate its commitment to providing Jamaicans with the 'fastest wireless broadband service'. Its corporate affairs office was also tightlipped on future supply plans with ZTE Corporation.
It might still be too early to determine who now has the bigger share of the pie, but with the 'big three' announcing future investments in their broadband networks it does seem that the battle is just beginning. However, a determining factor will be the popular choice of the consuming public, who continues to pursue quality service at a more affordable cost.