Blue-Stream: C&W protecting monopoly

Blue-Stream, the TT-based telecommunications company, which will be using its own fibre optics system to deliver its services across the region, is charging  that Cable and Wireless (C&W) is using delaying tactics to protect its monopoly.

Blue-Stream raised the stakes in the telecommunications landscape by announcing that it will begin providing internet and data connectivity across the Caribbean from this month. Observers say this signals the start of competition for TSTT and Barbados-based C&W, which have dominated the telecommunications markets in their respective countries. Called Parasol, the service is initially aimed at international and regional businesses wishing to link up multiple offices or connect them to the internet.

However, Richard Carruthers, a director of Blue-Stream, charges that C&W has been obstructing new entrants to the market by using delaying tactics. “This is hardly surprising, as the Caribbean is a cash cow for C&W and is subsidising their global operations which are haemorrhaging cash.” However, despite these problems Carruthers said Blue-Stream has established itself on five islands including Antigua, Grenada, St Vincent, Trinidad and St Kitts. “We have been mostly supplying call centres that have been exempt from the stranglehold C&W have on communications,” he said in a telephone interview. Blue-Stream hopes to add Barbados and St Lucia to its list very soon. He noted that C&W has given Blue-Stream “trouble” in every territory that it has entered. Quoting from a New York Times report, which stated that C&W made over US $445 million profit from 11 Caribbean islands in 2001, this region, he said, accounted for only 28 percent of C&W global sales, but a whopping 95 percent of profit before charges. “That gives you an idea how valuable protecting their monopoly is to them, and how much pricing power they retain by controlling international bandwidth.” TSTT, he said, should not consider Blue-Stream a threat yet, because the company is not going to provide cellular or fixed line telephone. “Maybe TSTT will act differently because they are half state-controlled. Our objective is to co-operate with them and share future profits.”

Carruthers said in this depressed global telecommunications climate, Blue-Stream still managed to secure a loan from RBTT. The bank has granted Blue-Stream a seven-figure US dollar loan facility, but Carruthers would not elaborate. Blue-Stream’s parent company, the DataState group is also involved in a project to build a new fibre optic cable in the region. Accounting firm, Ernst and Young in Trinidad, is currently seeking local investors for Blue-Stream to raise money for an equity stake in the company. The new multi-million dollar underwater fibre optic cable, EC-1 is pitted directly against C&W’s Eastern Caribbean Fibre System (ECFS) cable. A Luxembourg registered company, Island Fibre Holdings, has been contracted to the Caribbean’s newest fibre optic cable. The EC-1 cable is expected to run from Puerto Rico to Trinidad with planned stops along the way at St Martin, Martinique, Guadeloupe, Barbados, St Lucia, Antigua, Grenada, St Vincent as well as the Grenadines, Dominica and St Kitts and Nevis. There is presently only one cable providing inter-island Internet and data connectivity in the region. This is the Eastern Caribbean Fibre System (ECFS), which is largely owned and controlled by Cable and Wireless PLC. Rae-Ann Harper Walters, corporate communications manager, TSTT says the company does not have a problem with BlueStream building additional fibre optic cables. In an interview last week, the TSTT official said, “we don’t know anything about the pricing structure of Island Fibre or Blue-Stream so we will be unable to comment.”

Carruthers noted that Blue-Stream already has one client in Trinidad, a call centre called Kairi Technologies in Port-of-Spain, that has been operational for some months now. He added that the company intends to open its new head office in Port-of-Spain around March 10, having previously been based in Grenada. The Blue-Stream director said the company is interested in investing in Trinidad because it likes the dynamic business atmosphere and the number of large, multi-national companies that could become clients for their private network products. Carruthers said the initial focus in TT will be on companies that have a presence on several islands, and want to link all their offices together to share data and internet access. “By building them a private network they can save costs and become more efficient.” Business IT managers, if they choose, will be able to design their networks on Blue-Stream’s website: www.Blue-Stream.net. By simply stating the countries and connection speeds they want, a customised network blueprint will be generated and a price quotation delivered immediately. Each connection will be priced at the same rate no matter what the distance or number of countries needed. The Parasol network uses a pioneering mix of fibre and satellite links to ensure resiliency, Carruthers said. It was engineered by chief technical officer, Leigh Porter, who left C&W’s London operations a year ago to join Blue-Stream.  Blue-Stream boasts that it will be the first Caribbean-based company to provide such multi-island services, besides CW.

Some of the other products and services that Blue-Stream will be offering potential clients in TT include : mission critical internet connectivity; custom built private networks; wholesale global voice minutes; call centre solutions and dedicated and virtual server hosting. In the short term, the company’s will focus on Trinidad, Jamaica, Barbados and the Organisation of Eastern Caribbean States (OECS). Carruthers believes that Blue-Stream will be welcomed and viable. “Oh yes, we expect to be very successful in our venture, because businesses need choice of providers, better service and better pricing.”  Blue-Stream is a British Virgin Island (BVI) registered company that began operating two years ago in anticipation of liberalisation of the telecommunications market. The company began in Grenada and was formed by British nationals Sebastian Stephens, an entrepreneur who built one of the most expansive private data network in Europe in the late 1990s (called Wisper, it is now owned by C&W), Carruthers and ex-British army captain, Naunton Dickens who developed web based e-mail in the United Kingdom (UK). Over the last year Blue-Stream, through agreements with C&W, has managed to route international traffic through Trinidad, Grenada, Antigua, St Vincent and St Kitts. But these have been strictly for use by companies running private networks and call centres.