Haitel, a private company founded by Franck Ciné, a Haitian-American and former MCI/Worldcom executive, has lost subscribers since the arrival of Digicel in the Haitian mobile phone market in 2006. Now 5 years later with the launch of a fourth telecommunication company, Natcom, the future of Haitel just got fuzzier.
Most people perceive Natcom, which is a joint venture between Vietnam’s Viettel and the Haitian government, as a risk for Digicel.. However, with more than 2 million subscribers, revenues higher than 5 billion HTG and an advertising budget around 20 million HTG, Natcom will have to work extensively to steal Digicel’s position. The only company that risks to be endangered by Natcom’s presence is the third Mobile operator, Haitel.
In May 2006, Haitel, who adopted the CDMA technology, had from 300,000 to 200,000 subscribers representing a 40% market share.It was the largest Haitian company with estimated revenues of 880 million HTG.
The market entry of Digicel in May 2006 was a game-changing situation for Haitel. Digicel introduced low prices, attractive services, new market segmentation strategies and an aggressive advertising campaign. Digicel Haiti was able break the record of 1 million customers after just 8 months.
Digicel’s low pricesforced Haitel and other competitors to drop their prices and reduced. Haitel’s customer base.
In August 2006, in an attempt to regain, its leading position, Haitel launched Haiti’s first 3G network services via a CDMA2000 deployment. According to multiple technology analysts, this effort was pointless. The CDMA technology is more expansive than GSM, and it did not provide any competitive advantage for Haitel.
On June 6, 2007Franck Cine, the company’s CEO and majority shareholder ,was arrested and detained for fraud charges related to the bankruptcy of Socabank. He was detained for 25 months.The company suffered from the CEO’s absence. According to Mr. Marcelin , the former director of the Haitian telecommunication regulating agency, Conatel; Haitel’s market share decreased to a 2% market share in 2011.
In April 2011, responding to the questions of Sylvie Barak and Marc Speir, two IT journalisms from California, on Haitel’s level of street umbrellas advertisement compared to Digicel and Voila, Albert Mackemburg, chief legal counsel of Haitel responded: “We just cannot afford it. We’re surviving, not thriving. We have to spend our money on the things we need most.”
Will Haitel have the capacity to survive Natcom’s market entry?
Natcom executives claimed they already have over 250,000 subscribers to its mobile services, representing a 7% market share. If these numbers are accurate, Natcom has surpassed Haitel in just one month. Will Haitel subscribers switch to Natcom? It is evident that Haitel has a cash flow problem, and cannot afford to lose more subscribers.
Other mobile carriers are already reacting to Natcom presence by upgrading their network capacity. Voila/Comcel and Digicel may switch to an LTE 4G network.
According to the former General Director of Conatel, Voila/Comcel is expected to spend $45 million in the next few months, while Digicel is about to spend more than $100 million to upgrade their networks.
How can Haitel change the situation?
We doubt Haitel has the financial capacity to undertake the large investment of millions of dollars.
According to Stephanie , a Haitian marketing student , Haitel should look into 6 possible solutions:
1) Change Haitel leadership. it is time for Mr. Ciné to hand over the company to a younger generation of executives.
2) Emphasize products and services that work. Haitel is still able to provide a faster internet connection with its 3G network than Digicel and Voila and it is the first to offer monthly unlimited calling plan.
3) The company should look for opportunities in sub-niche markets.
4) Consider a possible merger with another Haitian internet service provider or another leading Haitian IT company.
5) Establish an effective rebranding and advertising strategy.
6) Start offering smartphones. The smartphone market is a cash cow for most carriers. In Haiti the average revenue for a feature phone user is $13, whereas the average revenue for a smartphone customer is up to $35.
The fact that Haitel is holding a 2% market share does not imply that the company will fail. Other companies in the world hold a similar market share. For example, Metro PCS, a cellphone company in the USA particularly popular for its affordable services is making billions of dollars of revenues and holds a 2.6% market share.
The future Haitel mainly depends on its executive’s willingness to make the company prosper, and on customers’ willingness to embrace the change Haitel must undertake.
