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Telesur revamps strategy to face mobile competition

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In April this year, the government awarded licenses to two new entrants, Irish owned Caribbean operator Digicel and Curacao based UTS. Only last week Digicel finally reached an interconnection agreement with Telesur, allowing it to launch operations.

Telesur has 80,000 fixed lines in service and 320,000 mobile subscribers in a population of some 500,000. Internet subscribers are under 10,000, of which some 40% is ADSL, and most of the country's internet users access it through cyber cafes.

The new competitors are sure to introduce competitive pricing strategies and promotions, and Telesur's response will be to offer basic broadband services over its EV-DO network, 24/7 customer care and per second billing, as well as a plan to launch prepaid roaming on Friday (Nov 9), Currie said, speaking on the sidelines of the CariCam Mobile conference in Puerto Rico this week.

Furthermore, in an attempt to improve efficiency of its broadband network, the company plans to launch locally hosted email accounts before year-end and promote the development of local content. According to Currie, most bandwidth is used up by content hosted outside the country. Even the majority of email is hosted overseas.

The company expects to post revenues of US$130mn in 2007 compared to US$120mn in 2006, the majority of which is mobile revenue.

Investment in fixed-line

Despite the competition being faced in mobile telephony, Telesur is prioritizing investment in fixed line services, using wireless technology such as CDMA450, provided by Qualcomm, to reach out to remote areas.

Telesur has convinced the government to take a long-term approach and keep investing in fixed line infrastructure, which is needed as a backbone on which to build future technologies, Currie said. But it needs wireless technology to provide last mile connectivity.

"CDMA450 will be used as a fixed line service, it will not be used for mobility. It is mainly for the coastal areas, to complement the cables we already have," Currie said.

For the moment the company has ruled out deploying WiMax, which is more expensive, and given the very low penetration of PCs in the country Currie does not see it as a worthwhile investment.

Currie also ruled out the possibility of selling PCs as part of an internet service package since Suriname's small population and yearly per capita GDP of US$2,800 make it difficult to achieve the economies of scale needed to bring PC prices low enough to be attractive.

"In Suriname you're talking about around 100,000 potential purchasers. The purchasing power of our company is not that big. If you're talking about three or four million, then you can of course reduce the price and investments in the computer," Currie said.

That is why Telmex has been successful with this strategy in Mexico, where there are millions of potential buyers, he said.

Even the MIT's One Laptop Per Child project, otherwise known as the "US$100 laptop" initiative, needs large volumes of buyers to make it worthwhile, Currie said.

Universal access and call centers

Suriname's government does not operate a universal access or services fund, but recent reforms to telecoms legislation include provisions for the creation of such a fund, Currie said. For its part, Telesur is lobbying the government to introduce ICT policies that will boost universal access, Currie added.

But any attempt to stimulate access to PCs in schools will require cooperation between the government, the private sector and non-profit organizations, the executive said.

One area Telesur is focusing on is the construction of call centers to create employment. The telco recently signed a joint venture with a Dutch firm to set up a call center that will outsource services for companies based in Holland and Suriname. The 200 employees of the call center already represent one fifth of Telesur's total staff.

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Tags: qualcomm  customer care  ict  digicel  wimax,  call center  laptop  ev-do  last mile  telmex  email  interconnection  caribbean  Suriname