Identifier
Created
Classification
Origin
06BRIDGETOWN205
2006-01-31 13:39:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Bridgetown
Cable title:  

CINGULAR WIRELESS - BARBADOS HOLDS UP SALE TO

Tags:  ECPS EINV BB 
pdf how-to read a cable
VZCZCXRO7502
PP RUEHGR
DE RUEHWN #0205/01 0311339
ZNR UUUUU ZZH
P 311339Z JAN 06
FM AMEMBASSY BRIDGETOWN
TO RUEHC/SECSTATE WASHDC PRIORITY 1783
INFO RUCNCOM/EC CARICOM COLLECTIVE PRIORITY
RUEHDG/AMEMBASSY SANTO DOMINGO PRIORITY 5790
UNCLAS SECTION 01 OF 02 BRIDGETOWN 000205 

SIPDIS

SENSITIVE
SIPDIS

SANTO DOMINIGO FOR FCS

E.O. 12958: N/A
TAGS: ECPS EINV BB

SUBJECT: CINGULAR WIRELESS - BARBADOS HOLDS UP SALE TO
DIGICEL OVER NETWORK CODE ISSUE

REF: 05 BRIDGETOWN 1480

UNCLAS SECTION 01 OF 02 BRIDGETOWN 000205

SIPDIS

SENSITIVE
SIPDIS

SANTO DOMINIGO FOR FCS

E.O. 12958: N/A
TAGS: ECPS EINV BB

SUBJECT: CINGULAR WIRELESS - BARBADOS HOLDS UP SALE TO
DIGICEL OVER NETWORK CODE ISSUE

REF: 05 BRIDGETOWN 1480


1. (SBU) Summary: The Government of Barbados has demanded
all cellular phone companies adopt the Barbados specific
Home Network Indicator (HNI) Code. By doing so prior to the
approval of the pending sale of Cingular's Barbados business
to Digicel, the government will force Cingular to comply by
A) making a very expensive and unnecessary business change
or B) stop marketing and selling Cingular in the country.
Cingular struck a deal in June 2005 to sell its Caribbean
business to Irish company Digicel. Nine of the ten
Caribbean governments involved have approved the sale,
leaving Barbados as the only country holding up Cingular's
exit from the Caribbean market. Ambassador Kramer met with
two Cingular representatives on January 26 and set up a
meeting for them with a top technology advisor to the Prime
Minister so the company can lobby for the deal's approval.
End Summary.


2. (SBU) Ambassador Kramer met with Jonathan Koshar, head
of Cingular in Barbados, and Stephanie Bariault, Cingular VP
and General Manager of Caribbean Services, on January 26 to
discuss the Barbados government's insistence that Cingular
switch from using a U.S. Home Network Indicator (HNI) to a
Barbados HNI before the company can sell its Barbados
operation to Digicel. (Note: Cingular struck a deal to
sell its Caribbean business to Digicel in June 2005, pending
government approval in each island with a Cingular presence
(reftel). Antigua and Barbuda, Anguilla, Bermuda, the
Cayman Islands, Dominica, Grenada, St. Kitts and Nevis, St.
Lucia, and St. Vincent and the Grenadines have all approved
the sale, leaving Barbados as the only country holding up
Cingular's exit from the Caribbean market. End Note.)

--------------
What is an HNI?
--------------


3. (U) An HNI is a code programmed into a mobile phone that
identifies which network the phone uses as its home network.
This code is highly technical and has no effect on customer
service. Cingular has been using a United States HNI
because it is cheaper and allows the company to pass along
savings to its customers.

--------------
Why the Government Wants the Change
--------------


4. (SBU) The Barbados government has repeatedly demanded

that Cingular (and previously AT&T before Cingular bought
their Caribbean operation) change from using a U.S. HNI to a
Barbados HNI as a matter of national sovereignty and to
better audit calls to ensure Cingular is paying the proper
taxes on roaming charges. (Comment: According to Cingular,
accounting company PriceWaterhouseCoopers thoroughly audits
Cingular's Barbados operation and the government has no
reason to believe it is being shorted on taxes. End
Comment.) Reportedly, the former monopoly telecom company
in Barbados, Cable and Wireless, uses the Barbados code and
has lobbied the government to force its two competitors to
make the expensive conversion to the Barbados code, so that
C&W can gain competitive advantage.

--------------
Why Cingular Cannot Make the Change
--------------


5. (SBU) Since Cingular is leaving the region, the company
has zero incentive to invest in Barbados. Therefore, the
company's only option is to comply with the GOB ruling by
closing its sales and marketing operation and not taking any
new customers. This means the company will have to shut
down three stores on the island and lay off about twenty
workers. The Cingular representatives made clear to the
Ambassador that their company is leaving Barbados under any
circumstance.

--------------
What are the Interests?
--------------


6. (SBU) Cingular just wants out of Barbados. Digicel is
an ally of Cingular in this fight because Digicel also does
not want to change its HNI. The Cingular representatives
said Digicel might take legal action against the government
to avoid the expensive conversion to a Barbados HNI. The

BRIDGETOWN 00000205 002 OF 002


government apparently agrees with the sale of Cingular to
Digicel in principle, but is using it as leverage to force
the two companies to adopt a Barbados HNI. Barbados has
taken the attitude that, as a sovereign country, it can and
should force mobile phone companies to use the Barbados
code, regardless of economic impact.

--------------
Next Steps
--------------


7. (SBU) The Ambassador set up a meeting for the Cingular
representatives to talk with a senior technology advisor to
the Prime Minister. This advisor is known for his influence
and knowledge of technology issues, and could help Cingular
get its message across to the government. Post will
continue to monitor this issue and help Cingular lobby the
Barbados government for a reasonable solution if necessary.


8. (SBU) Comment: Cingular will make the case to the
government that fighting one company over HNI (Digicel) is
easier than fighting two (Digicel and Cingular). The
advisor agreed to give Cingular a sense of who to lobby and
how to present its case. The Cingular representatives said
one of the reasons the company is pulling out of the
Caribbean is precisely because they have had to deal with
issues like this that have made doing business here a
constant struggle. End Comment.

KRAMER