"We decided it was appropriate to write down our interests in Jamaica because our vendors experienced difficulties building out the network at the speed that we had planned, which caused us to re-assess the value of that operation," said Michael J Small, Centennial's CEO.

The company planned to take a US$34-million charge "to write down to current value investments in non-Caribbean undersea fibre optic cables and in the Jamaica operation", Small said.

But this, Small said in San Juan last week, did not translate to an intention to leave the Jamaican market.

"(Centennial) has not entered into any transaction to dispose of its interest in Jamaica," he stressed. "We are in conversations with third parties, including our partner, Oceanic Digital, regarding initiatives to enhance our Jamaica business."

Paulwell was unavailable for comment yesterday.

Oceanic already has 49 per cent in Centennial (Jamaica), the mobile phone provider which started operations in Kingston, St Andrew and St Catherine towards the end of last year.

Last week, Paulwell announced that Oceanic, a US-based firm, was close to an agreement to acquire NASDAQ-listed Centennial's stake in the Jamaica operation. Centennial also has operations in Puerto Rico, the US Virgin Islands (USVI) and the Dominican Republic (DR).

In fact, the direct parent company of Centennial Jamaica is Centennial de Puerto Rico, the fourth largest telecommunications operation in the US Commonwealth, which has 1,200 employees.

An Oceanic buy-out of Centennial Jamaica would be a reversal of what happened previously.

It was Oceanic that paid the Jamaican Government $45 million for one of two cellular licences auctioned in late 1999 to operate mobile phone companies. It later sold 51 per cent of its local operating company to Centennial with the partnership adopting the Centennial name.

The report of the sale by Centennial America of its shares in the Jamaican subsidiary did not surprise some in the telecommunications industry. They have been tracking Centennial's financial problems in the US and the negative impact which the so-called "dotcom meltdown" has been having on American stock exchanges in recent months. The tech-heavy NASDAQ has been reported to be particularly bruised by the bear run.

Earlier in the year, Standard & Poor's (S&P) revised its outlook on Centennial and its subsidiaries, which carry a debt of US$1.8 billion, to negative from stable. At that time it said its revision was based on "the continuing deterioration of the company's domestic-operating cash flow and slower-than-expected growth in its Caribbean operations".

S&P also noted Centennial's "high financial risk derived from its high debt burden, increasing competition and the integration and execution risks of its acquisitions in the Caribbean".

Centennial spent $600 million in Puerto Rico and Jamaica, the USVI and the DR and was in debt for about $300 million used in expansion of its Caribbean operations.

Minister Paulwell suggested that the Oceanic take-over from Centennial would have no impact on the local operation and other industry sources agreed. For instance, Patrick Terrelonge, the principal of InfoChannel, an Internet service provider in which Centennial took a 40 per cent stake, said the sale would have no impact on his company's operation.

Centennial bought into InfoChannel two years ago as it strategically angled for a deeper stake in Jamaica's telecom industry which is scheduled to be fully liberalised next year.

http://www.jamaicaobserver.com/magazines/Business/html/20020720T230000-0500_29184_OBS_CENTENNIAL_SAYS_IT_IS_NOT_LEAVING_JAMAICA.asp