Cable & Wireless Company Writes Rules on How to Lose Business

Although I’m using Cable & Wireless (Lime) of Jamaica, the principles apply across the board.

Originally, the Jamaican Telephone Company was a statutory body; this meant, it was run by Government.  After Hurricane Gilbert in 1988, Cable & Wireless, of the United Kingdom, decided to buy it under a two step process which will warm the cockles of every Capitalist’s heart.

Step One was greedily swallowed by government; that is to transform the JTC into a public company. Let the public buy shares in it’s own telephone company.  This idea was very popular because no one perceived Step Two;  that C & W, (through a front man) would buy up most of the shares.

The public flocked to purchase the shares, (filling government coffers), C & W bought more shares until it held the vast majority.  At that point, the name; Telecommunications of Jamaica, was dispensed with. There was no reason to mask ownership, and it became the monopoly all hated.

Called Careless & Worthless by it’s subscribers, this monopoly prevented the advent of the Internet until 1995, and retarded the use of cell phones, as of all the possible protocols, it elected the most expensive, least useful.

With Internet connection ridiculously expensive and ‘competitors’ forced to use the CW connection, with cell phone coverage only 5% of the island, one could see that these two features were not all that popular.

When competition was allowed in cell phone providers, Digicel, the first rival, was swamped. Gaining more customers in three months than it expected in eighteen, it was unprepared for the onslaught.

Growing to 100,000 customers in 100 days, within a year of operation it had 2/3rds more customers than C & W.  Many had been C & W customers, others had shunned anything that was coming from the hand of Careless & Worthless.

There was only one tiny corner on which C & W had a ‘lock’; that is using the cell phone to connect to Internet.

Although slow, the cost was reasonable, and charged at a flat rate. Those who could not get wired connection, or needed Internet on the move, became customers. (This is before 3G, and even after the introduction). The cost charged for this service, whether Digicel, and MiPhone, [which would become Claro] was more expensive.

Many who used Digicel as their cell phone for calls also had their handy C & W cell for Internet connection.

Someone figured out that one could use the computer’s cell to make local calls, and these calls would be ‘free’, falling under the monthly cost of Internet connection.

C & W did not advertise it’s Internet by Cell phone, this was word of mouth.  It was not public knowledge that one could use the computer’s cell to make ‘free’ local calls.   

If C & W was run intelligently, it would have maintained this service as is/where is.  Getting $500 a month from a subscriber is more than getting $0.  The ‘loss’  of revenue via ‘free’ phone calls should not have even been noticed. 

However, continuing bad business practices, as soon as C & W realised its customers were getting a benefit, it acted to so limit access that one could not even call for assistance on the computer activated phone. One could not pay on line.

Although this was annoying, for to pay for the monthly usage one had to find a land line and use that land line to pay the cell bill, many put up with it.  If there was a problem with the handset or connection, again, one had to find a land line, for the phone was so crippled it had no use, save if it could connect to the Internet.

As bad as this was came the dropping of service, and the slowing down so that 2.5 kps was standard.

C & W, now operating as Lime, (called sLime) for no logical reasons, decided to change the contract it had with these customers.  Overnight the cost went from a $500 flat rate to $40 per meg.  Bills were sent out which were higher than were the customer to take full broadband access.

The few remaining customers dispensed with the service. Hence, instead of receiving $500 a month from a hundred thousand persons, it went to virtual $0.

Wise entreprenuers would, to maintain some presence in the market, recognise that with the various packages available, the ‘free’ local calls made by it’s Internet customers was really no actual loss. The basic cell phone user puts a $100 on their phones, gets $100 free credit bonus, and often needs to be reminded that their ’subscription’ will run out before they put another $100 on the phone.  Hence the average user spends no more than $200 a month.  The Cell as Modem user spends $500, and gets no ‘free’ credit.

In business there is the ‘bottom line’.  One can not focus on ‘losses’ when there is no ‘bottom line’ loss.  Yes, this tin of peas may be priced so cheaply that each purchase ranks as a ‘loss’, but how many people come into a supermarket and leave with one tin of peas?

How many people will come for the ‘free bag’ with purchases, and have to make purchases to get the ‘free bag’.  How many people, thinking they are getting ’something for nothing’ will use a service until some fool makes it into nothing for something.

As sLime’s customer base continues to fall, (land line customers dropping, Digicel climbing, and Claro grabbing strays here and there), if sLime didn’t plan to fail, it should of.