Many nations, one voice
..a history of the Caribbean
telecom movement
The idea of forming an organisation of Caribbean telephone companies was first suggested by Clarence Hordatt, the then General Manager of Corporate Services at Telco (Trinidad and Tobago) in 1984.
Hordatt had broached the idea to his CEO, Neilsen McKay and Administrative Assistant Ramesh Sharma.
"Two days later", he recalls,"we were on a plane".
McKay and Hordatt would take the idea to CEOs throughout the English-speaking
Caribbean, and by November that same year a preparatory meeting
of Caribbean telephone companies was held in Barbados, out of
which came the motto: "Many Nations, One Voice".
A constitution was drafted in Grenada that same month, and by
April 1995 the Caribbean Association of National Telecommunications
Organisations (Canto) was formed, comprising of eight English-speaking
members of Caricom.
As the name of the association suggests, the first constitution
of Canto specifically excluded overseas carriers from participation.
In 1984, the Caribbean's telecommunications system was largely
comprised of state-owned telephone companies dependent on foreign
multinationals for external communications.
"A lot of the companies were separate", Hordatt explained,
"and the multi-national companies used to tell us what we
should charge for overseas calls."
Nationally owned telcos, as they are called, found themselves
at the mercy of companies such as Cable and Wireless.
"Here we were in the Caribbean and we were not speaking to
one another", Hordatt observed.
"All of Cable and Wireless met regularly and decided on policies
and procedures, so whenever they came they spoke with one voice",
he explained.
The impact was significant.
The former Secretary General of Canto, Felipe Noguera, pointed
out that revenue splits between Cable and Wireless and the nationally
owned companies were typically 75-25 in favour of the overseas
companies.
In the case of Belize, its government owned telephone company
earned just 13 per cent of the income from overseas calls, with
the remaining 87 per cent going to the foreign owned textel.
With the formation of Canto, the information imbalance between
national telecommunications companies and the overseas carriers
would be addressed as an office was established as a department
of Telco in Port-of-Spain.
Canto would only establish an independent Secretariat in 1989
when Canto Trinidad and Tobago Company Limited was registered.
Hordatt, and Gillian Marcelle, an economist, were assigned one
share each in the new company, which was established with a nominal
share capital of $50,000.
The share capital value of the company grew rapidly as Canto began
developing its highly successful programme of negotiating volume
discounts for its members.
The Caribbean region is one of the largest purchasers of telecommunications
equipment in the world. Even at its inaugural meeting in 1985,
Winston Butler of Telco (TT) would point out to members that the
region was expected to spend in excess of US$1 billion in plant
and equipment between the years 1985 and 1990.
"How can Canto maximise the return on this aggregate investment
in terms of econometric impacts and economies of scope and scale?",
Butler asked.
In 1988, the volume discount programme was launched and would
become so successful that by 1990 that it was being estimated
by Jamaica that the returns it received from discounts from a
single supplier was worth ten times the cost of being a member
of Canto.
Indeed, volume discounts negotiated with major suppliers such
as Northern Telecom, Mitel, LM Ericsson and AT&T was able
to bring in some US$15 million in credits and rebates by 1994
and the commission earned by the Canto Secretariat allowed it
to purchase its own building in Port-of-Spain.
So that in 1994, the share capital was increased from $50,000
(TT) to $950,000, and a mortgage was assumed for property on Picton
Street, Port-of-Spain where the Secretariat is now based.
The Volume Discount programme allowed Canto to organise a group
of small, independent telecommunications companies into a united
voice able to swing deals with large multinational producers of
telecommunications equipment.
By the early 1990s, Canto's membership had grown to thirty and
now included members from the non-English speaking Caribbean and
in 1991, embraced thirteen members from the Cable and Wireless
group and the organisation's constitution modified to allow two
overseas members on the Board of Directors.
With the success of the Volume Discount programme, the international
profile of the association increased significantly and Canto was
being invited to present papers at international conferences staged
by organisations such as the International Telecommunications
Union (ITU), International Institute of Communications, Pacific
Telecommunications Council and the Organisation of African Unity.
Canto, which was building its research portfolio, was also producing
studies that were being cited in Universities in Latin America
and the United States and by institutions such as the Inter American
Development Bank (IDB) and the Federal Communications Council
(FCC) of the United States.
Indeed, Canto claims to have forestalled initiatives by the FCC
to unilaterally reduce the contentious International Call Accounting
Rates which was an issue broached by the organisation since 1991.
The direction of Canto began changing once Caribbean governments
began divesting their ownership of telecommunications in the region.
With the long distance previous long service providers now represented
on Canto's board, Canto's goals have now been harmonised with
multinational interests.
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