By Al Edwards, Business Co-ordinatorMOBILE TELEPHONE service providers Digicel and Oceanic have won a decision against the Office of Utilities Regulation (OUR), which will see Cable and Wireless Jamaica (C&W) releasing about $170 million related to the termination of international calls over the last 18 months.
The OUR had previously determined that it would set international rates at $8.00 per minute. Both Digicel and Oceanic opposed the decision, stating that rates should be determined by the market. They took the matter to a judicial review.
On Monday evening, Justice Dukharan handed down his decision in favour of Digicel which means that the OUR will not determine termination rates.
In May of last year, the OUR issued certain rulings regarding interconnect charges to be made and amounts to be collected for calls to mobile customers from overseas callers. These rulings changed the basis on which these amounts were to be apportioned between C&W and mobile carriers. The rulings resulted in lawsuits from both Digicel and Oceanic.
Two months later, the Supreme Court ordered that pending the trial, C&W was to retain the difference between the sums payable under the old basis and those payable under the new basis. The hearing of the lawsuits was concluded in February.
In a release, C&W expressed concern 'over the potential adverse effects that this Supreme Court ruling in relation to call termination rates will have on the telecoms industry, especially on new entrants'.
C&W has been holding these funds 'in an appropriate account and will pay over the amounts now due in accordance with the ruling by the Court'.
A STRAIN ON THE BUSINESS
Speaking to The Gleaner from Miami last night, Digicel's Chief Executive Officer, Seamus Lynch, said: "The money that C&W was holding did put a strain on the business but we were vindicated in the end. This decision is useful to all telecoms players and goes a long way in helping the liberalisation process of the industry in Jamaica. It's business as usual for us."
Digicel's chief financial officer David Hall added: "This now means that the market will determine fixed to mobile rates. The OUR proposed a rate of $8.00 a minute. The rate is currently $7.00 a minute, so you can see that the customer benefits when the market is allowed to dictate rates. The same now applies to international incoming rates. We can now deal directly with United States carriers and no longer have to use C&W. So for instance, if one has to place a call to the United States it means one doesn't have to go from Digicel to C&W to AT&T. It means calls can be placed directly from Digicel to AT&T."
Oceanic, which announced last week that it had accessed a US$30 million loan from the American Inter-Development Bank (IDB) which will now allow it to complete its islandwide network operations, also participated in the suit and will have about $5 million released to it from C&W.
