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FM AMEMBASSY PORT AU PRINCE
TO RUEHC/SECSTATE WASHDC PRIORITY 4007
INFO RUEHZH/HAITI COLLECTIVE PRIORITY
RUEHBR/AMEMBASSY BRASILIA PRIORITY 1219
RUEHSA/AMEMBASSY PRETORIA PRIORITY 1061
RUEHQU/AMCONSUL QUEBEC PRIORITY 0577
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UNCLAS SECTION 01 OF 02 PORT AU PRINCE 001697 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR WHA/CAR 
EB/IFD 
EB/CIP/BA 
STATE PASS TO USAID FOR LAC/CAR 
INR/IAA (BEN-YEHUDA) 
COMMERCE FOR SCOTT SMITH 
TREASURY FOR JEFFERY LEVINE 
WHA/EX PLEASE PASS USOAS 
 
E.O. 12958: N/A 
TAGS: ECON ECPS ETTC PGOV HA
SUBJECT: HAITI: CELLULAR INTER-CONNECTIVITY AT LAST 
 
PORT AU PR 00001697  001.2 OF 002 
 
 
¶1.  Summary: Minister of Public Works, Transportation and 
Communication Frantz Verela announced that all three cellular 
operators in Haiti -- Comcel, Digicel and Haitel -- will 
finally be inter-connected by September 24 at midnight. 
Since May, the two incumbent operators, Comcel and Haitel, 
refused to connect with the newest operator, Digicel.  Comcel 
is currently the largest operator in Haiti with about 510,000 
subscribers.  Digicel and Haitel have around 300,000 
subscribers each, and Digicel expects to surpass Comcel soon, 
thanks to its extremely aggressive campaign.  The lack of 
inter-connectivity underscores the many obstacles to 
development, but Verela's initiative to settle the dispute 
signals GOH willingness to act as the proper regulator in 
improving halting procedures and updating antiquated laws. 
End summary. 
 
Interconnection Dispute 
- - - - - - - - - 
 
¶2.  Though all three operators were involved, the conflict 
resided primarily between Comcel and Digicel.  It started 
with Digicel's scheme to use the Jamaican Mobile Country Code 
(MCC).  The Jamaican MCC offers Digicel an international 
roaming advantage over the Haitian MCC.  Also, the GOH 
offered Digicel exemption from customs duties in May while 
Comcel's own exemption was not approved until August 4, 
despite Haitian regulations stating that all competitors must 
have an even playing ground.  (Note:  Due to the dispute over 
the exemption code, and because all GOH officials use Digicel 
phones, Haitians in the telecom industry claim the government 
favors Digicel.  End note.) 
 
¶3.  The national telecom regulator (CONATEL) could not solve 
the problem of inter-connectivity, which began with Digicel's 
arrival in May.  Minister of Transportation, Public Works and 
Communication Frantz Verela personally mediated a solution in 
late July/early August.  In return for an agreement signed by 
Comcel, Digicel and Haitel, the GOH promised the same 
advantages to all operators and asked Digicel to switch to 
the Haitian MCC.  Digicel requested five years to complete 
the migration and said it will cost about US $ 30 million. 
 
Telecom Industry Needs a Strong Legal Framework 
- - - - - - - - - - 
 
¶4.  Ultimately, the problem between Comcel and Digicel -- 
other than aggressive marketing strategies and harsh 
commercial attacks -- lies in a weak regulatory framework for 
the developing telecom sector.  The framework dates back to 
1977, when the national telecommunications company, Teleco, 
had a monopoly on all telecommunications services.  In 1999, 
the World Bank and the Inter-American Development Bank tried 
in vain to assist the GOH with the creation of a strong legal 
framework to guide the development of the sector.  Jean Marie 
Maignant, head of the telecom unit at the Ministry of Public 
Works said the absence of a regulatory and legal framework 
could further jeopardize the development of the sector.  Weak 
regulations hamper the entrance of new operators, thereby 
limiting competition.  CONATEL Director General Montaigne 
Marcelin recognized the weakness of his agency vis-a-vis the 
cellular operators and said this is to blame for the recent 
dispute over inter-connectivity. 
 
The Road Ahead 
- - - - - - - - - - 
 
¶5.  Maignant told econoff that he is expecting a World Bank 
(WB) mission at the end of September to assist with updating 
the 1999 draft of the telecom regulatory framework.  The GOH 
hopes to present an updated telecom bill to parliament in 
early 2007.  Verela said the GOH will be looking for a 
strategic international partner to help revitalize -- and 
eventually privatize -- Haiti's national telecommunications 
company, Teleco.  (Note: Michel Presume, newly-named Director 
General of Teleco, is a former member of the Council for 
Modernization of Public Enterprises.  End note.)  According 
to Maignant, Teleco is also currently implementing an 
underwater fiber-optic cable project in cooperation with the 
 
PORT AU PR 00001697  002.2 OF 002 
 
 
Bahamian Telecom Company.  This will extend the Bahamas 
Domestic Submarine Cable Network to Haiti, instantly 
increasing and updating tele-communications capacity in Haiti. 
 
¶6.  Comment:  The inter-connectivity dispute underscores the 
need for regulations and up-dated laws in Haiti.  The 
tumultuous recent past has put Haiti behind its neighbors, 
particularly in the rapidly advancing telecommunications 
industry.  According a recent report by the Inter-American 
Development Bank, the state of telecommunications 
infrastructure varies throughout Caribbean, with 85 percent 
in the Cayman Islands and 1.7 percent in Haiti.  Haiti has a 
long-way to go, but with guidance and support from its 
neighbors will catch-up significantly under Verela's 
initiative. 
SANDERSON