WHILE the battle with Digicel over who dominates the mobile market takes centre stage, Cable & Wireless has not neglected its land line division.

"What we are seeing happening with land lines is that as the new technology evolves there are new value-added services that the public requires. There is a move away from circuit switch networks to packet switch networks that carry the same voice and data capabilities over the same network. We have invested a lot of money in that transition. We have put in an ATM network running over our land line network. This will allow us to offer new capabilities to our fixed line customers more notably IP specific services. So the basic strategy is that you re-engineer your circuit switch network to an IP network and then you offer value added services on that network that makes it more appealing.

"Illustrative of this is stretching land lines to DSL where we are able to carry much higher speeds than was traditionally available with the dial up Internet service. We have had extremely good take up on our DSL service which is available on land lines. Our strategy is to continue to transform the network and make it IP based."

A DISTINCT ADVANTAGE

Mr. Barrow made it clear that C&WJ would not neglect land lines and did not view it as an outdated communication tool. He said that the level of investment in land lines would be reduced mainly as a result of the popularity of mobiles and other competitors coming into the market place and offering services similar to land lines. However this could serve as an ideal opportunity to make that particular service more competitive by offering inducements to get people using land lines more frequently. As a full integrated provider, C&WJ has a distinct advantage and it will seek to optimise on that.

Errald Miller, Gary Barrow's predecessor conceived of the idea now implemented by C&WJ that repairs to fixed lines would not be conducted by the company's technicians , rather customers would employ the services of their own technicians thereby freeing up C&WJ personnel to concentrate on other strategic areas. This Mr. Barrow says has been very successful with the public now accepting it.

INTERNET

The Internet has grown in popularity in Jamaica with the number of households subscribing to a service increasing every year. What plans are in the pipeline for its Internet service?

"We have always maintained that we have the best Internet service in Jamaica. When it comes to speed and connectivity, we are undoubtedly ahead of our competitors. What we are finding is that our high (top end) residential and corporate customers tend to stay with us because of our reliability and that is how we have positioned ourselves. Over the last two years we have invested significantly in our Internet infrastructure. That has made a tremendous difference in the quality of service we offer and that is how we want to differentiate ourselves from the rest of the pack.

"We moved our Internet traffic from off satellite to fibre optics cable systems. In terms of speed and reliability, that has made a tremendous difference. We are now using carrier grade services which allows us to pick up viruses before they hit our customers computers. Our objective is to offer the best available service in Jamaica.

"We do recognise that at a national level there is a limitation to access such as just buying a Personal Computer (PC). What we have done through our own corporate citizenship role is participate in helping many schools to log on to the Internet by donating computers. I think many people tend to overlook our sponsorship of free Internet access in schools throughout Jamaica. This has a profound effect on getting primary and secondary school pupils onto the Internet and thereby start the process of becoming Internet savvy from an early age. What we all have to recognise is that you will never have the kind of penetration in Jamaica that is enjoyed in first world countries. However access to the Internet superhighway is very critical if we as a country are to become competitive and our children enjoy the same opportunities as those in the more industrialised

economies of the world. It is important therefore that our children get access to certain hubs such as libraries and Internet kiosks."

As technology evolves, the price of access should come down. The mobile phone is now a means of accessing the Internet and those prices continue to fall which can only be good for the customer. GPRS now means where one was once constrained by whether a fixed line existed they can access the Internet via their mobile phone wherever there is coverage.

"It is no longer the case that one can only access the Internet via a fixed line and this is more profound than a lot of people realise."

Local companies such as Imex Technologies and InfoChannel have come onto the scene looking to prosper from the IT explosion. Mr. Barrow sees this as encouraging as they offer new products and services which provides a necessary level of competition for the regional telecoms giant.

Newcomers in the marketplace will find niches, he acknowledges, and he can see certain alliances being formed. It is now generally recognised that IT is one of the most dynamic areas in business today. Many companies are now aware that they have to recreate themselves or they will go out of business. "The businesses that are participating whether as providers or as service takers are doing absolutely the right thing. They know they have to reduce cost if they are going to be globally competitive. Others that are aggressive and entrepreneurial by nature realise there are opportunities for doing other kinds of business. There are plenty of profit and revenue opportunities in the IT business in Jamaica today."

SHARE PRICE

C&WJ's new found confidence has seen its share price perform positively over the last few weeks. Today its stock price stands at $1.26 and continues to advance.

"The organisation has done the right things in terms of the efficiency initiatives, driving down costs and repositioning itself both externally and internally. We are ideally suited to maintain our leadership position in the local telecoms industry. As long as I am here that is going to be my objective and that will be reflected in the shareholders value.

RESULTS

In the quarter ended June 30,2003 C&WJ grew profit attributable to stockholders by 36 per cent compared to the same period last year. This represents earnings per stock unit of 3.13 cents.

This growth was a result of the implementation of programmes to rationalise key business processes and improve operating efficiency as part of an ongoing transformation exercise. Profit before net finance costs and taxation was $1.18 billion compared to last year's $917.2 million. Net profit attributable to stockholders stood at $527.2 million compared to last year's $388.1 million. Current Liabilities increased to $14.3 billion up from last year's $12.4 billion.

The company attributes this to the parent company and other related companies. The increase in finance cost relates to exchange losses arising on operational transactions during the year, plus unrealised exchange losses arising from a revaluation of foreign currency loans at period end. However, operating expenses were 22 per cent lower than the corresponding period last year.

Outpayments to other carriers also fell by 7 per cent following the full liberalisation of the international voice market from March 1, 2003.

WHY C&W ENJOYS A DOMINANT POSITION IN THE CARIBBEAN

It is no secret that the Caribbean remains fertile ground for C&W and that it has lost its standing in other parts of the world. Why is this so.

"I think unlike other companies, we have a very long tradition in the Caribbean and we have been a part of national development across the region. Our name is synonymous with inner-city development, education, health and sport - we are a part of Caribbean life. There will always be this monopolistic perception but ultimately the investment we have made will ultimately in time yield the type of value and loyalty around tradition and nation building.

"Once we deal with the issues around service, being aggressive and agile and that new image comes across, we will see the benefits coming through. We will continue to play the very important corporate citizenship role. Our longevity and ability to implement strategies will be the basis of our survival".