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The Inter-American Development Bank (IDB) broke from tradition to make a direct loan of US$30 million (J$1.8 billion) to cellular service provider Oceanic, to help fund its infrastructure development in Jamaica.
The loan will among other things, enable Oceanic to introduce mobile Internet services to the Jamaican market.
"The loan will allow us the funding for the completion of the network, our business plan going forward, as well as data and Internet services," said Craig McBurnett, Oceanic's chief executive officer, on Wednesday.
In a press statement the IDB stressed that it was the first time it had loaned money directly to the Jamaican private sector without government sovereign guarantee. It did not say why.
McBurnett declared that it was a positive endorsement on the outlook for his telecommunications company.
"It is sign that the IDB believes that there is a promising future in Oceanic business plan...We have been working on getting the loan for over a year," he told the Observer.
The total cost of the project is US$85.2 million, for which Oceanic will provide US$55.2 million.
The loan will be disbursed in January, at which time McBurnett said, more specific details would be disclosed.
Oceanic needs 13 more cell sites along Jamaica's north coast to complete its lay out, which industry sources believe is critical to the continued growth of its customer base.
"The company was still in its aggressive growth stage" said McBurnett, who estimates the company's present subscriber base to be "close to 70,000". Last year it was about half that amount.
Currently, Oceanic is testing its high-speed Internet access, and picture-sending capability (called 1XRTT) on three cell sites in Kingston.
By the first quarter of next year, the company will test the system using specific customers. There is no date set yet for its commercial availability.
Oceanic had estimated that it could cost US$2 million (J$120 million) for its cell customers to gain 1XRTT access -- which is nearly twice the Internet speed that is now provided to those who are hooked up to the cellular service offered by its two competitors -- Digicel and Cable & Wireless Jamaica.
Oceanic began offering cell phone service in Jamaica about two years ago having, in 1999, paid US$45 million to the Jamaican government for the cell licence. There are about 1.4 million cellular lines in Jamaica.
http://www.jamaicaobserver.com/magazines/Business/html/20031211T220000-0500_52974_OBS_OCEANIC_SECURES______B_IDB_LOAN.asp |
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