Digicel critical of new model to line mobile rates
Possible plans to drop mobile rates a step forward by the Office of Utilities Regulation (OUR) would lead to Jamaica offering the lowest worldwide calling rates, according to Digicel within a multi-page critique of a planned rate-setting model.
The OUR features countered by labelling Digicel's phrases surprising and premature.
The lower rates would stymie investment and ultimately reduce the network size, argued Digicel in its reaction to the OUR's 'Management Accountability Framework Business Plan and Budget', posted for the OUR website.
rates already lower
"The office (OUR) seems most keen to modify mobile termination rates to the minimum level that it can according to its latest actions. The rates we have seen suggested within the latest model would represent by far the lowest mobile termination on the planet in a calling-party-pays environment; something in the order of one-fifth of the minimum rate in any other region. In fact, the office's proposal is very close to a insurance plan of bill and keep, inches stated Digicel in its 12-page reaction, which offers Chief Operating Official Richard Fraser as contact.
Calling rates already dropped since last summer using the Government setting an interim at wholesale prices termination rate of J$5 one minute, down from J$9.
Mobile termination rates will be the fees mobile companies charge different carriers to transfer calls on their networks. It was a legislative fast solution to a near decade-long lawful fight, and mobile providers slashed rates in response by up to two-thirds.
The power to set the particular interim rate was conferred on OUR while using the passage and signing of the particular Telecommunications (Amendment) Act 2012.
The OUR is currently within the consultation process on the long run Incremental Cost Model (LRIC), which you could end up even lower rates. Rival provider LIME previously stated that it anticipates further reductions.
LIME, the former monopoly but now the smaller mobile provider, welcomes the reduction because it would further level all calling rates—a key help growing its market share.
But said Digicel in the LRIC study: "If implemented with its latest iteration, [it] guarantees under recovery of investments for termination for a real (full size) network as well as incentivises mobile operators to reduce how big is their networks. "
A latest World Bank study indicated of which Jamaicans spend 3. 0 percent of their income on the basket of mobile rates truly compared with 4. 3 percent in 2005, indicating the craze of lower rates.
The basket involves core calling rates and also costs for SIM cards. Even without adjusting for the sharp drop last summer, how much spend ranked Jamaica within the particular midpoint at 15th among many 29 Caribbean and Latin American nations captured within the survey.
The cheapest mobile basket of rates in the community in 2010 were Costa Rica at 0. 6 per cent, Trinidad as well as Tobago at 0. 9 percent, Bahamas at 0. 9 percent, and Barbados at one percent.
The OUR, in a reaction this month, argued that Digicel's response prejudged the results of the LRIC study.
"The office is surprised the brunt of Digicel's comments for the 2013-14 Work Plan concerns a project which is scheduled to be completed within this fiscal year and on which often no decision has yet been recently made, " said the OUR.
The LRIC model has been shipped to all major operators, including Digicel, intended for comments.
"We will treat Digicel's comments as being a partial response to the appointment but would also ask Digicel to add in them in its formal reaction to the consultation so that other stakeholders can have a chance to comment on them, inches said the OUR.
Digicel's mobile subscriber base has expired two million. LIME avoids disclosure upon subscriber figures, but said this added some 150, 000 customers within the last few three months.
