Telecommunications
Ripple Effect
Changes Take Hold At Guam's Telco Sector
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| GTA President and Chief Executive Dan Moffat says his immediate priority is to improve the company’s business systems. PHOTO: FRANK WHITMAN |
The privatization process started slowly in the late 1990s and gained momentum as government officials correctly became convinced, and convinced the public, that a government entity lacked the incentive and flexibility to compete effectively in the fast-paced, deregulated telecommunications business. In January 2005, the public agency was sold to TeleGuam Holdings, which is owned by Shamrock Holdings (the investment firm for the Roy Disney family) and General Electric.
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GTA also announced it would provide state-of-the-art cable television service as early as mid-2005. Though those plans have yet to come to fruition, the announcement clearly had an effect.
Two months later, in March 2005, Marianas CableVision, the island’s only cable television provider, was sold to Seaport Capital, a New York-based private equity fund. Later that year, MCV purchased local long distance and Internet service provider EC Comm. In January 2006, Seaport hired Craig Thompson, a 22-year veteran of Time-Warner Cable Inc., as MCV’s new chief executive officer. In response to the potential competition from GTA, Thompson’s “marching orders were ‘get MCV up to grade to a mainland cable company quickly,’” he said. “That meant changing our video product dramatically and tuning up our Internet product.” MCV also offers cable broadband Internet and long distance phone service.
As a result of upgrades during the past year and a half, MCV now offers more channels, real-time or same-day (when more practical) programming, improved picture quality as a result of the transition to digital from analog tapes, automated ad insertion and, most recently, video-on-demand. The company has also expanded its broadband Internet service throughout the island and continues to upgrade that product.
A third big-money investor—NTT DoCoMo of Japan—moved into the Guam market in December when it concluded its $72 million purchase of GuamCell Communications, SaipanCell Communications and the assets of Guam Wireless Telephone Co., known by the brand name, HafaTel. Mark Chamberlin, GuamCell president, is now the chief executive officer of the new company.
A major aim of DoCoMo is to support its Japanese customers who visit Guam and Saipan. The company serves 56 percent of the Japan market, and Guam hosts about 1 million Japanese tourists each year. For the time being, the ownership change remains seamless as the GuamCell, SaipanCell and HafaTel brands remain intact. The DoCoMo name is likely to first appear in tourist areas. The company continues to plan its long-term integration of services, locations and marketing.
DoCoMo, through its new subsidiary, now owns HafaTel’s GSM network, which is also DoCoMo’s roaming platform. Customers can expect to see the same Third-generation, data-intense mobile technology in use in Japan, Korea and the United States, Chamberlin said.
The company has launched an aggressive upgrade program, initially focusing on the GSM infrastructure and then other areas. It will spend about $10 million in 2007 and probably a similar amount next year, Chamberlin said. “We’re limited more by human resources than by capital,” he said.
The local ownership of IT&E, Guam’s other large mobile phone, Internet and long distance provider remains intact, though rumors of a pending purchase have been circulating for months. It, too, has launched a GSM phone service.
Meanwhile, GTA has hired a new management team, which offers a change in direction and brings a wealth of experience and success. Dan Moffat, GTA’s new president and chief executive officer since January 11, left New Edge Networks, the company he co-founded in 1999, shortly after it was purchased by EarthLink last year for $144 million.
“GTA is the size of company and the type of company that I can get excited about,” he said. “The sorts of communications businesses that GTA are involved are right in my sweet spot, my background. And GTA is a company that can benefit from what I can do.”
Also in January, GTA hired Nelson Tanaka as its chief operating officer. Tanaka worked for Verizon Communications in Hawaii and ran its Maui operations, and most recently was chief operating officer for Blue Sky Communications in American Samoa.
GTA’s cable television plans have been put on hold until next year as Moffat’s immediate priority is to improve the company’s business systems in order to “reap the benefits of some of the investments we’ve made in the infrastructure,” he said. “GTA has put $15 million a year into (capital expenditures) for the last two years and we’ll spend another $15 million. The key area this year is going to be on our systems. We’ve contracted with Martin Group and we’re going to revamp our customer service and our billing system. That’s the core of any communications business. We put a lot into the infrastructure and our systems have held us back.”
The company is also completing the upgrade to its GSM mobile phone network and Moffat expects to have both global roaming and strong island wide coverage by August (service in the hilly, less-populated southern portion of the island has been a challenge for all Guam wireless phone providers).
Moffat’s previous company, New Edge, provided networks for businesses, including Starbucks and Sbarro Pizza, and government entities. “You cannot run any business now without a network, certainly not multi-location businesses,” he said. The networks included WiFi services and a point-of-sale network. “There are things we can do for business customers (in Guam) that we’re not presently doing. We’ll be looking specifically at opportunities to get deeper, and better serve our business customers.”
