Phone rates may rise - As C&WJ looks to counter reported billions in losses By Erica Virtue, Staff Reporter Jamaicans could again face sharp increases in their telephone bills as the activities of illegal call service operators continue to inflict heavy losses on Cable and Wireless Jamaica (C&WJ), making it difficult for the company to keep current rates down. Illegal VSAT (very small aperture terminal) operators, who provide cheap telephone calls which bypass C&WJ's network, is collecting millions of dollars annually. Their gain is impacting heavily on C&WJ's ability to maintain residential telephone rates at the current costs. Industry officials said C&WJ's losses, which The Sunday Gleaner was unable to confirm with the company last week, have been a steady $1.5 billion per year for the last three years. At that rate, officials said, C&WJ will eventually be forced to remove its subsidy on local telephone calls. Those calls are subsidised from the profits of international calls. The officials said VSAT operators provide cheap calls, using special satellites to pick up signals, which allow telephone traffic inside and outside of Jamaica, bypassing C&WJ's network. The Office of Utilities Regulations (OUR) said that if the losses are as bad as C&WJ has reported, it will affect residential telephone rates here. "It was incoming overseas calls that was subsidising the land lines. So if they lose money, which they use to provide the subsidy, then they will argue that they will have to find new rates for the land lines," said OUR Executive Director, Winston Hay. The number of illegal operators, Mr. Hay said, has grown over the years, and because of the mobile nature of the operations, it is difficult to catch the perpetrators. The illegal operations are being carried out in communities, plazas and at rent-a-car businesses. Mr. Hay said C&WJ previously experienced losses with the International Call Author-isation System (ICAS), but said those were significantly reduced. "Its ability to contain the loss has kept residential line rates at current levels," he said. Maurice Charvis, director of Analysis and Research at the OUR, said illegal operators can be found in several parts of the island and this has provided grounds for C&WJ to bargain for rate increases. "It is going to be very difficult to maintain that loss and what is going to happen is that local rates will have to go up to its true cost," Mr. Charvis said. C&WJ was given significant increases last July, which saw a 38 per cent increase for calls within parishes and 24 per cent increase for calls from one parish to the next, for residential customers. The cost for rental of lines also went up from $210 per month to $280. Mr. Charvis said that C&WJ suffers most of its losses on incoming calls, but said additional losses have been identified from Internet service providers. "The computer-to-computer calling is one thing. What is worse is that there are some providers who will offer the service to non-subscribers of their service and therefore set up an international service all on their own. It is hawking in millions of dollars," he said. He noted that the passage of the Telecommunication Act, has provided a legislative framework on which the C&WJ can act. He said the OUR's role under the Act does not involve going on their premises. However, it can have hearings and call witnesses where illegal operations have been identified. The three agencies which can target the illegal operators are the OUR, C&WJ and Spectrum Management Agency, but each has specific roles. However, "it is very difficult because they can simply move from place to place. And the technology is also cheap, and accessible. "We cannot police the system forever," Mr. Charvis said. C&WJ officials have remained silent on the matter despite several telephone calls and questions sent to the company by fax, by The Sunday Gleaner since May 17.
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