Blue Power and Firestorm
The battle for the local cell phone market begins in earnest By Patrick van Beek
Stabroek News
February 18, 2007

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On Wednesday George-town experienced something of a revolution as the marketing machinery of Digicel and GT&T kicked into high gear. Following a well published countdown campaign with full page colour advertisements and radio slots Digicel opened its doors for business. The fact that the company's corporate colours coincide with those worn by many Guyanese on Valentine's Day made February 14th a canonical choice. Digicel is offering three basic phones at the price of G$2,900 (G$3,364 inclusive of VAT), $500 in call credit, a free bag and, on Wednesday, tickets to see Akon in concert at the national park.

GT&T counteracted with a campaign of their own. A float churning out high energy music gave the day a festive feel and GT&T were effectively giving away phones: offering a handset loaded with more call credit than for the price of the handset plus a bag. Both companies have stipulated that offers are good while stocks last.

Queues and

more queues

I have to admit I only became aware that GT&T had an offer when I enquired about the length of the queue outside of Gizmos & Gadgets (assuming the queue was for the Digicel offer) only to be told by one of the employees that the store was 100% Celllink. Judging by the numbers of people waiting outside the participating outlets the campaigns of both companies were having the desired effect. I suspect many people took advantage of both offers.

Having planned to purchase a handset myself I had expected that a lot of people were queuing in order to obtain the tickets for the concert. However the fact that queues remained on Thursday and to a lesser extent Friday indicated that there are stocks remaining and demand for both companies' offers remains strong.


GT&T is the incumbent telecommunications provider in Guyana. Owned 80% by ATN and 20% by the Government of Guyana the terms of the privatisation gave GT&T exclusive rights to voice and data under a 20 year agreement. Despite this, GT&T made a concession to allow competition in the cellular market.

Digicel began operations in Jamaica in 2001 and is 80% owned by Irish entrepreneur Denis O'Brien. Since then it has grown its subscriber base through continued expansion throughout the Caribbean. Though the statistic that is often quoted is the rate at which Digicel obtained its subscribers in the first 100 days (100,000) the statistic I found to be more surprising was the total number of subscribers as at December 2006, which according Digicel stood at 4,000,000 in twenty-two markets throughout the region.

Despite a valiant attempt by Cel*Star (under the brand U-mobile) to break into the local market, it was considered by many to be unrealistic to see it as a serious competitor to GT&T. Matters were not helped by delays in obtaining interconnection due to questions over the ultimate ownership of the company and GT&T launching its own GSM service shortly before U-mobile was due to launch. Due to difficulties in activating the phone I brought from the UK with GT&T I signed up with U-mobile shortly after launch; however following a distressing incident at the airport after I was unable to make a call to find out why my e-ticket had been cancelled, when I replaced my handset I signed up with GT&T.

GT&T's GSM service was a victim of its own success; during 2005 there was massive congestion in the Georgetown area, following which they increased the number of towers. Though there were several rumours during 2006 that Digicel was seeking to acquire Cel*Star, it was not until close to the end of the year that a deal was finalised.

Competition is generally a good thing and I can only hope that with two players, both with considerable resources at hand the market will develop based on quality of service and keen pricing. The cost of internet bandwidth provided over land-lines is several times that of more developed countries. I can see that the provision of low-cost data over the wireless network could have enormous potential.

The free Opera Mini browser ( allows any phone with Java MIDP functionality to access any web page on the internet, a feature previously reserved only for more expensive smart-phones. Given Digicel's recent announcement to stream TV to handsets in Jamaica over their data service, is it a coincidence that the ability to carry data (GPRS) was a prominent feature of their fliers advertising phones?

VAT act?

I was somewhat dismayed that neither Digicel's nor GT&T's marketing showed the prices of their offers inclusive of VAT. The example set by the largest companies will filter through to every business throughout the country and by not showing VAT inclusive prices it will send a signal that VAT exclusive pricing is okay.

I quote directly from the section 90 (2) of the VAT Act "Subject to subsection (3), a price advertised or quoted by a taxable person in respect of a taxable supply is required to include tax and to state in the advertisement or quotation that tax in included". Subsection (3) goes on to say: "A person may advertise or quote a price in respect of a taxable supply as exclusive of tax provided -

a) the advertisement or quotation also states the amount of tax charged on the supply and the price inclusive of tax; and

b) the price inclusive of tax and the price exclusive of tax are advertised with equal prominence or impact."

I would like to believe that the Commissioner is using his powers conferred under section 90 (5) to "approve any other method of displaying prices of goods or services by such person" rather than simply turning a blind eye to breaches of the act.

Either way it is a disservice to all Guyanese consumers to allow vendors to display prices for which the final price cannot be determined without calculation. Indeed the advertising provisions in the UK in relation to VAT were changed as there were many complaints that the widespread practice of placing exclusive prices in greater prominence than inclusive prices was misleading.

As a case in point a relative who had come to purchase a phone at the same store was not aware that the price excluded VAT and had to ask me if I had sufficient cash to be able to lend her the money if she had not walked with enough to cover the VAT.


When the furore over the low-priced handsets dies down I suspect a large proportion of the Guyanese population will own a handset. However, the key to success in the cellular business is the revenue earned from making calls. The acid test will come once the free credit runs out! At that time I suspect price will be the key determinant. Having made calls on both networks I have to say I cannot detect any difference in quality so I do not think that quality of service will be a serious factor around town; though Digicel offers voicemail out of the box which must be applied for with GT&T.

Digicel also offers the ability to divert a call on busy to voicemail, which is handy if you do not want to take a call but you would like to know what your call party has to say - at present GT&T only offers the ability to send a "busy" signal. It should be noted that some of Digicel's mobiles are locked to its network, which means that no other network's SIM can be used, though I suspect many people will have signed up for both companies' offers.

There may well be differentiation in more remote regions based on quality of service.

The provision of data-based services remains a large unknown, crucial will be the price point, though there will be those that will subscribe regardless of cost. I think this will be a small proportion of subscribers.


At the end of the day I think the battle for market-share will ultimately be driven by price. Digicel's rates are broadly comparable with those in Jamaica and Trinidad & Tobago. To sign off I have shown a comparison of the pricing between the two providers. It looks like Digicel's pre-paid rates are more competitive, while GT&T's post paid rates generally have the edge.

(Prices in brackets include 16% VAT)

The bundled rate is the rate for the "free minutes" determined by dividing the cost of the package by the number of bundled minutes. Note the packages are not directly comparable as Digicel offers "free" texts and the monthly subscriptions, number of bundled minutes and deposits may differ.