At a busi­ness fo­rum in Wash­ing­ton DC this week, Prime Min­is­ter Kam­la Per­sad-Bisses­sar said that the T&T Gov­ern­ment was giv­ing con­sid­er­a­tion to the in­tro­duc­tion of a third mo­bile phone op­er­a­tor in this coun­try. In a gen­er­al­ly well-craft­ed and in­for­ma­tive speech, the Prime Min­is­ter re-traced some of the his­to­ry of the lib­er­al­i­sa­tion of the telecom­mu­ni­ca­tions in­dus­try in T&T, start­ing with the es­tab­lish­ment of the Telecom­mu­ni­ca­tions Au­thor­i­ty of Trinidad and To­ba­go in 2005.

Some achieve­ments to note, in 2005, the Telecom­mu­ni­ca­tions Au­thor­i­ty of Trinidad and To­ba­go (TATT) was es­tab­lished and the telecom­mu­ni­ca­tions sec­tor lib­er­alised.Since then, com­pe­ti­tion has blos­somed across the broad­cast­ing land­scape with 30 ra­dio sta­tions and nine tele­vi­sion sta­tions es­tab­lished through­out the coun­try. New en­trants have al­so pen­e­trat­ed the mo­bile and broad­band sec­tors. While ac­knowl­edg­ing that Trinidad and To­ba­go had "one of the high­est mo­bile pen­e­tra­tion rates in the world and of­fers some of the cheap­est broad­band rates in the re­gion," Mrs Per­sad-Bisses­sar went on to add that the "Gov­ern­ment is cur­rent­ly ex­plor­ing the pos­si­bil­i­ty of go­ing be­yond this and in­creas­ing the lev­el of com­pe­ti­tion in these fields, par­tic­u­lar­ly the in­tro­duc­tion of a third mo­bile op­er­a­tor to the mar­ket."

Hav­ing achieved one of the high­est mo­bile pen­e­tra­tion rates in the world and some of the cheap­est broad­band rates in the re­gion, does the lo­cal mo­bile tele­pho­ny mar­ket need the in­creased lev­el of com­pe­ti­tion that will come with the ar­rival of a third mo­bile op­er­a­tor? The lat­est quar­ter­ly mar­ket up­date on the lo­cal telecom­mu­ni­ca­tions in­dus­try pub­lished by the Telecom­mu­ni­ca­tions Au­thor­i­ty re­veals that the mo­bile mar­ket is now ma­ture with the num­ber of mo­bile voice sub­scrip­tions grow­ing by on­ly two per cent to 1.8 mil­lion sub­cribers be­tween the March-June quar­ter of 2009 and the cor­re­spond­ing quar­ter in 2010. To­tal gross rev­enues for mo­bile ser­vice ac­tu­al­ly de­clined by two per cent in the pe­ri­od, while the av­er­age rev­enue per user de­clined by three per cent.

The Prime Min­is­ter al­so said: "We be­lieve that a tru­ly com­pet­i­tive telecom­mu­ni­ca­tions en­vi­ron­ment will stim­u­late in­no­va­tion while ben­e­fit­ing the con­sumer as ser­vice providers will have to main­tain their com­pet­i­tive edge, con­stant­ly im­prov­ing on their ser­vices." With to­tal rev­enues and rev­enue per user in slow de­cline, it is un­like­ly that the two ex­ist­ing mo­bile op­er­a­tors are go­ing to be able to earn the prof­its that would al­low them to make the nec­es­sary re-in­vest­ment in­to their busi­ness, with the ad­di­tion of a third op­er­a­tor. With­out the nec­es­sary in­vest­ment in up­grad­ing mo­bile plat­forms from to 3G and 4G, it is quite pos­si­ble that added com­pe­ti­tion in this space will lead to a de­te­ri­o­ra­tion in the qual­i­ty of ser­vice rather than an im­prove­ment.

Rather than stim­u­lat­ing in­no­va­tion, a third op­er­a­tor is like­ly to stim­u­late a short-term price war, dur­ing which the mo­bile op­er­a­tors ramp up their mar­ket­ing bud­gets and fo­cus on rop­ing in the few tod­dlers in this coun­try who do not now have mo­bile phones. It is pos­si­ble, in the con­text of an over­ly ag­gres­sive price war in which all three op­er­a­tors lose mon­ey, that one or the oth­er of the ma­jor play­ers may sim­ply de­cide that tak­ing mon­ey from po­ten­tial in­no­va­tion and ac­tu­al share­hold­ers to sub­sidise al­ready-over­mo­biled con­sumers makes no sense. If com­pe­ti­tion leads to one of the ma­jor play­ers pulling out, the end re­sult would not be more com­pe­ti­tion, greater in­no­va­tion and con­stant im­prove­ments in ser­vice but less com­pe­ti­tion, less in­no­va­tion, a de­cline in ser­vice qual­i­ty and much high­er prices.

In­stead of look­ing to at­tract a new com­peti­tor to the lo­cal mo­bile mar­ket, the Gov­ern­ment should fo­cus its ef­forts to en­sure that the pos­si­bil­i­ty of an­ti-com­pet­i­tive be­hav­iour is elim­i­nat­ed. Hav­ing achieved most of the ben­e­fits from the ex­ist­ing lev­el of com­pe­ti­tion, the Gov­ern­ment should not be­lieve that more of a good thing is nec­es­sar­i­ly in the na­tion­al in­ter­est.