Digicel MTR case rejected

13 Jul 2012

Digicel, Jamaica’s largest cellco by subscribers has lost its attempt to reverse the decision of sector watchdog the Office of Utilities Regulation (OUR) to lower mobile termination rates (MTRs). Stabroek news reports that the operator was seeking leave to go to the Judicial Review Court to challenge the regulator’s authority to alter MTRs. Further, Digicel was looking to have the court stay the implementation of the new rates, which come into force from 15 July. Whilst Justice Ingrid Mangatal, the judge hearing the case, will today give her reasons for rejecting Digicel’s case, the provider is expected to seek to appeal the decision.

As previously noted by TeleGeography’s CommsUpdate, the OUR determined a flat interconnection rate of JMD5 (USD0.056) per minute as part of an effort to level the playing field following Digicel’s controversial takeover of rival operator Claro. The merger saw Digicel’s market share immediately leap by more than 20 percentage points to 82.0%. The acquisition left Digicel with just one competitor in the segment, LIME Jamaica, which at the end of March 2012 had a market share of just 17.2%. In its ruling, the OUR described competition in the wireless sector as ‘fragile’, saying that the decision to lower the MTR was necessary to ‘prevent the two remaining mobile operators from leveraging their dominance in terminating calls on their respective networks’.