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Cell Phones Driving a Social Revolution in Haiti and Caribbean

Cellular is bringing to the poor and marginalized people a feeling that they are now part of the society.

PORT-AU-PRINCE, Haiti -- In a country where most people live without paved roads, running water or even electricity, there's one modern convenience that more than a quarter of the people are enjoying: a cell phone.Cell phones are connecting Haitians in unheard-of ways, touching the lives of rich and poor, farmer and urbanite, and propelling this Caribbean nation to nearly first-world stature -- at least when it comes to talking on the phone.

Consider what life was like for Soimise Lautin before her daughter handed her a cell phone a year ago. To contact relatives, the charcoal merchant had to take a three-hour journey in overcrowded buses along perilous rural roads.

"Now I don't have to do that. I just call to know what is happening," said Lautin, one of the millions of Haitians without any of the country's 150,000 expensive and often unreliable land lines. "It has changed my life."

While the penetration of land lines remains at just 2 percent countrywide, cellular penetration has increased from zero to 29 percent in less than 10 years, according to government figures. The industry represents the largest investment in Haiti in decades.

"Cellular brings to the poor and marginalized people the feeling that they are part of the society," said Jean-Marie Raymond Noel, who oversaw a recent U.N. Development Program study of 13 major Haitian cities that showed four out of five households had at least one cell phone.

The revolution is not limited to Haiti.

Cell phones also are spreading rapidly across the Caribbean region, where government deregulation has led to competition, drastically reduced rates, increased access, better service and even societal changes.

In a TV and Internet ad for the recent elections in Jamaica, the Jamaica Labor Party aired a video of a farmer in the middle of a yam field yapping on his mobile about the lack of progress under the rival People's National Party.

"The fact that a farmer in a yam field can answer a cell phone is a sign of progress," fired back former PNP foreign minister K.D. Knight.

In Suriname, the downloading of video porn has some parliamentarians calling for a ban on cell phones in schools, while in neighboring Guyana the government already has declared classrooms cell phone-free zones. Guyana, like Trinidad and other islands, is considering banning the use of cell phones while driving.

Some major roadways in Jamaica and Trinidad have been marked by dueling billboards in which popular reggae and soca stars and sports figures promote the London-based Cable & Wireless (C&W) and rival Digicel, headquartered in Ireland. In Turks and Caicos, C&W has offered businesses free cell phones and green-and-white paint jobs, its brand colors.

The cellular expansion has sprouted related businesses. In Haiti, enterprising Haitians have realized they can make a living charging others to use their cell phones, and have set up shops along the streets.

While C&W's logo dominated TV screens during this year's Cricket World Cup held around the English-speaking Caribbean, Digicel's red and white colors are hard to miss whenever Haiti's national soccer team takes the field.

In Jamaica, like in Haiti, much of the cell expansion is credited to Digicel, which debuted in the Caribbean in 2001 with an offer of affordable service. The telecommunications provider signed up 100,000 customers in 100 days.

Digicel's success in Jamaica ended C&W's 106-year telephony monopoly in the former British colony and served as the launch pad for Digicel's aggressive island-hopping campaign that touts competitive rates, cheaper handsets, international roaming and other services.

In response, other companies have been forced to fast-track offerings of high-tech devices like the BlackBerry, whose availability in the Caribbean significantly lagged that in the United States until recently.

The marketing blitz has extended to South Florida, where local radio ads inform Caribbean natives that they can now pre-pay cellular minutes for friends and relatives on the islands.

Haiti's HaiTel company allows Floridians to buy a phone over the Internet and have it delivered anywhere in the mountainous country.

"Digicel is the new word for competition in Haiti," said Kesner Pharel, a leading Haitian economist. "The revolution isn't just with the cell phones but the way these people are managing their companies. They are going right to people's faces and selling their companies."

Colm Delves, CEO of Digicel Group in Jamaica, won't say how much the company, which reported more than $1 billion in revenue for the fiscal year that ended in March, is spending on advertising.

"Our competitors are spending more on marketing than we are," he said jokingly. "Our marketing strategy is quite simple: it's to get the Digicel message out there."

As for criticism that the cellular rage is making the poor poorer because they prefer to buy prepaid phone cards over food, Digicel's Haiti CEO Ghada Gebara said industry analysis shows that improved telecommunications has become a catalyst for economic growth in developing countries.

And it's not just about making money. Digicel executives say that the company's foundation is building 20 schools in Haiti with the profits from its $260 million investment in the country.

"Everything that we are generating in terms of cash flow we are reinvesting back into the market," Delves said.

But it has not been easy for Digicel, the newcomer in the telecommunications field. In almost all of its 22 markets, it has met resistance from established rivals, which block interconnectivity or charge non-network users higher fees to call the competitors' phones.

In Trinidad, as in Haiti, that has translated into people often carrying more than one phone. This summer, a fed-up Digicel sued C&W in London seeking multimillion-dollar damages over what it alleges to be "unlawful tactics."

C&W, which reported a 19 percent increase in mobile revenues for the year ended March and claims to remain the leader in most of its Caribbean markets, issued a statement saying Digicel's claim is without merit and "will be vigorously defended."

Digicel nonetheless recorded a 144 percent increase in overall regional subscriber growth, with 5.2 million users in the 12-month period ended in June. With 1.6 million customers in Haiti, Digicel's customer base there is now nearly as big as that in Jamaica.

Digicel had projected signing up 300,000 users over two years. It instead lined up 1 million in only eight months.

"Haiti has been a phenomenal success," Delves said. "Our experience has exceeded any of our initial expectations."

Digicel's decision to enter the Haitian market was not based on a formal market survey, Delves said, rather via two days of driving the traffic-clogged streets of this capital city.

"What we saw was a huge population that was being completely underserved," Delves said. "There's just so much trading in Haiti done on the streets. There's a big cash base and market there."

--Digicel founder and CEO is Irish billionaire Denis O'Brien, who earlier this year acquired 100 percent control of Digicel after raising $1.4 billion through a bond issue.
--After paying $47 million for an operating license in Jamaica, the company in 2002 signed up 100,000 customers in 100 days.
--The company has 3,500 employees working in 22 markets in the Caribbean and El Salvador. It will soon expand to Suriname.
--Digicel has grown from 355,000 subscribers in 2002 in Jamaica to 5.2 million today Caribbean-wide.
--Fifteen months after Digicel's market entry, Haiti has roughly the same number of Digicel customers as Jamaica. Of the 2.5 million total cellular users in Haiti, 1.6 million are with Digicel, making Haiti the company's fastest-growing

--The company has invested more than $260 million in Haiti, financed the construction of 20 schools and donated $1 million to the Haitian Football Federation.
--The price of handsets in the region has dropped from $100 to $15 for a no-frills device. Rates have also dropped by as much as 50 percent.
Source: Digicel Group

--Since 2005, the telecom industry has been almost completely liberalized.
--With the exception of the Bahamas, there is competition in all markets with an average of three telecommunications providers per country. Some have up to as many as seven.
--In 2005, the Caribbean, which has 40 million residents, reported 12.11 million mobile users.
--Digicel says it has invested $1 billion in the region since 2001; Cable & Wireless says it has invested more than $522 million since 2003.
Source: Studies by CARICOM's Caribbean Regional Negotiating Machinery; Informa Telecom and Media, a U.K.-based company that provides marketing data to the telecom industry and media markets

(c) 2007, The Miami Herald. Distributed by McClatchy-Tribune Information Services via Newscom.

Photo © Rémi Kaupp, CC-BY-SA-2.5, Wikimedia Commons