Mass appeal: Public utilities jump into Colombia's wireless fray--with a paper salesman in the top job. (Connection).

Selling wireless phones the way some sell toilet paper is the challenge that Mauricio Mesa. boss of Colombia's recently conceived third cellular operator, has set for himself.

Colombia has lagged other large Latin American countries in bringing cellular services to its 44 million people. Only 10% of the population uses a cellular phone--far behind neighbors such as Venezuela, where 27% carry a cellular phone.

But Colombia Movil, the new company that will challenge U.S. baby bell BellSouth and Mexico's America Movil for a piece of the domestic market, hopes Mesa's track record shows he can drive up cellular use dramatically with innovative marketing for the masses.

Mesa was until January president of Familia-Sancela, whose paper and sanitary products, including toilet paper, are market leaders in Colombia. The company under Mesa doubled exports since 1996.

Understanding how to move basic consumer goods appealed to Colombia Movil's shareholders, Mesa says. "This is a mass consumer product. We use cellphones like we use toilet paper. And at the end of the day we are going to sell in the same channels," he says. He hints that his company's phones could soon appear on supermarket shelves.

The planned start-up of Colombia Movil services by year end will be the biggest shake-up in cellular telecom here since regional operating licenses were first issued in 1994. Services have become concentrated in the hands of Comcel, a division of Mexico's America Movil, and BellSouth, creating a national duopoly.

Colombia so far has missed the wireless boom. The government belatedly offered a PCS license for auction last year, and financially pressed international operators stayed away in droves. Existing cellular license holders BellSouth and Comcel were not allowed to bid, so Colombia Movil saw its chance. The company is owned 50-50 by two municipally owned utilities: Empresa de Telecomunicaciones de Bogota (ETB), Bogota's phone company, and Empresas Publicas de Medellin (RPM), Medellin's utility provider. In January Colombia Movil secured nationwide licenses for US$56 million, a fraction of the many millions previous operators paid under a complex national auction.

The companies hope the venture will be a money spinner for the two city halls. Paulo Orozco, ETB's president, predicts Colombia M6vil will have at least as many clients as ETB now does-2 million--within a decade. "That is very conservative. Our aim is much more ambitious," Orozco says.

So how does Colombia M6vil intend to compete with BellSouth and America Movil, two of the biggest names in Latin American cellphones? America Movil's Comcel, particularly, has been plugging keenly priced offers furiously and lifted subscriber numbers by almost 50% in 2002; it now claims two-thirds of the 4.6 million current cellular users.

The newcomer's exact business strategy is under wraps. But Colombia Movil will try to capitalize on its local knowledge, and on databases of phone and utility customers owned by its public-sector parents. "Obviously, as far as possible, we are going to use all the possible synergies with ETB and RPM's sales systems' Mesa says. That could mean offering consumers fixed-line, long distance and mobile services in a package, a fashionable offering--not yet highly successful--in many global phone markets.

But Colombia Movil lacks direct wire--less experience. "Our own know-how will help at the beginning, but we have to develop a commercial strategy that is much more aggressive than we have had so far," says Le6n Dario Osorio, telecom manager for the Medellin utility company. Executives promise innovative tariff schemes and contract plans for all market sectors, with both pre-paid and postpaid services. Customers can also expect call billing for seconds of use, rather than rounding-up to the nearest minute as competitors do, the company has suggested.

Attack plan. A big hint as to strategy to come: Colombia Movil chose Global System for Mobile Communication (GSM) technology rather than a rival system, called Code Division Multiple Access (CDMA). Mesa says GSM offers more flexibility to attack different market segments because of the greater and cheaper handset range. Carlos Rodriguez, a senior analyst at Pyramid Research in Cambridge, Massachusetts, says GSM is better to reach the mass market.

There is already friction between the newcomers and incumbents. BellSouth and Comcel have complained to the government that fixed-line company EPM's technology in some areas has allowed customers to use home phones on the move as if they were cellular handsets. The dispute remains unresolved. America Movil recently completed purchase of a 95% stake in Colombian wireless company Celcaribe for $9.6 million from Luxembourg telecom investor Millicom International Cellular.

Despite consolidation and what will clearly be a scramble to lock down new subscribers, analysts expect that there is space for everyone. Colombia is going to be one of the fastest-growing markets, because it has a long way to go, notes Rodriguez at Pyramid. Ever the salesman, Mesa remains upbeat: "Increased penetration will make the job much easier for everyone," he says. "It is much easier to acquire new clients than to steal clients from other people."