Cell phones on the money

TSTT, attempting to keep the customer base that was built through its monopoly status, has expended huge sums on its bmobile campaign, which yesterday featured music trucks and moko jumbies — an investment the company clearly views as necessary if it is not to lose customers to Digicel. And Digicel, in its turn, launched its operation with much fanfare, including a fashion show with models parading with cell phones in hand, to promise potential customers choice and superior service.

But all this is just froth. The litmus test of competitiveness has to do with how customers benefit.

One such benefit was seen just two days before Digicel’s official launch, with TSTT offering cell phones that had previously been priced at almost $1,000 for just $199 and $99. Indeed, the day after the Digicel launch, TSTT further reduced the price of the phones. So here we see the difference between being a monopoly and being a competitor, since TSTT’s monopoly prices were based on what the company calculated the market would bear, whereas its competitive prices are based on a calculation to keep customers happy. And, indeed, that promotion saw long lines, albeit not a mad rush as happened when the bmobile campaign was first launched, to get the low-priced phones.

Meanwhile, Digicel, which has yet to prove itself, is offering cell phones at reasonable prices from the start and promising reception in the most outlying areas, including a few miles out to sea. The company has already invested almost two billion dollars in its Trinidad and Tobago operations, showing how much it expects to make back. And, if is indeed true that the company even before its launch had 80,000 persons registered to get its services, Digicel’s estimate may well be on the money.

It is worth noting, however, that the customers who have been drawn by both TSTT’s and Digicel’s promotions and offers are not being drawn by need.

That is, it is hardly likely that the majority of customers who have been queuing up at both companies’ outlets don’t already have cellular phones. But the Trini mentality is one that finds it almost impossible to pass up a “deal.” So it didn’t matter if someone already had a cell phone.

Getting another for a mere $200 seemed like good sense —even if it meant signing a two-year-contract or spending more on phone cards for the new device.

Indeed, people find it impossible to remember how they got along without cell phones, even though the technology is less than a decade old. How did we make appointments, arrange limes, and call for help when our cars broke down? So ingrained has cell phone use become that people were not merely outraged, but even acted as though traumatised when TSTT’s GSM system went down for three days late last year.

So Trinidad and Tobago is probably already at the stage where the enhanced communication network provided by cell phones has improved productivity and efficiency. And, if this is so, people are continuing to buy cell phones for reasons other than need. Those reasons probably centre around having the latest technology, which in turn has to do with having a status symbol. And, if that is the case, both Digicel and TSTT can be assured of healthy sales for the foreseeable future.