OUR MTR recommendation rebuffed by Digicel

21 Feb 2012

Jamaica’s telecoms regulatory authority, the Office of Utilities Regulation (OUR) has proposed setting mobile termination rates (MTRs) at JMD5 per minute (USD0.06) as an interim measure, whilst it conducts a full analysis into the consequences of the controversial Claro acquisition, specifically the impact on customers of other providers connecting to the enlarged Digicel’s network. According to the Jamaica Observer, the OUR said that the measure will ‘prevent undue discrimination against other networks and removes an obstacle to fair competition.’ The response of the cellcos, which have been bitter rivals since Digicel’s entry to the market ended the monopoly of the Cable & Wireless subsidiary in 2001, was predictable: LIME, which would be the beneficiary of the proposed measure embraced the OUR’s suggestion, whilst Digicel rejected it.

LIME has recommended in the past that MTRs be set at JMD5 per minute, though it reportedly had hoped that the OUR would set the level even lower. Digicel meanwhile, said that the proposal was too early: ‘The OUR is currently undertaking a cost consultation process for the assessment of mobile termination rates for the entire industry … it would be premature for the OUR to make an assessment or recommendation on what termination rate it thinks ought to apply since they are yet to determine the type of cost model which ought to be built for this purpose. Importantly, the OUR is yet to gather the industry information and data to perform the requisite analysis… There is an established regulatory cost consultation process that is being undertaken, and it is only through this process that the OUR can conclude what would be an appropriate termination rate for the industry. Anything otherwise would amount to pure guesswork and would be wholly inconsistent with regulatory best practice and existing regulations.’