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 
 
¶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