Business

Flow joins telecoms battle

BY PAUL RODGERS Business Editor

Friday, July 27, 2012    

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FLOW joined the bitter telecoms war yesterday, attacking LIME for being "hypocritical" in its campaign to cut interconnection rates. LIME denied the charges, however, saying that its rates are regulated and approved by the Office of Utilities Regulation (OUR).

The spat is the latest in a series of heated exchanges between telecoms operators in the cut-throat industry.

The most recent was a price war in which first LIME and then Digicel, its arch-rival in the mobile market, slashed their prices last month.

That followed LIME's successful lobbying of the watchdog to reduce the fees charged for mobile calls between networks from $9 per minute to $5, effective July 15.

Digicel took the OUR to the Supreme Court to roll back the rate reduction, but the appeal was thrown out.

However, Flow complained yesterday that LIME's campaign for lower rates does not extend to the wholesale price for calls terminating on its landline network, which are higher than its comparable retail prices.

A national call from a Flow phone to a LIME landline at peak hours costs $1.08 to set up and $1.37 per minute, said Michele English, the president and chief operating officer of Columbus Communications, Flow's parent company.

The retail cost of a call from one LIME fixed-line phone to another is just $0.99, she said.

Typically you would expect the retail price to be lower than the retail cost, said a Flow spokeswoman. "Otherwise how can you compete?"

LIME is also refusing to let Flow connect directly to its mobile network, forcing calls to go through its landlines first, incurring additional "transit" fees of $0.13 per minute, English said.

"LIME is doing to us exactly what Digicel did to LIME," said English. "I call it hypocritical."

Flow charges its customers $0.95 per minute to call LIME landlines. "I make virtually nothing on LIME calls," English said during a visit to the Jamaica Observer.

Some 15 per cent of Flow calls terminate on LIME phones, and 85 per cent of those are charged at the regional or national rates. Regional calls could be as close together as New Kingston and Mona.

Flow charges a flat rate for landline telephones, making all calls within its network on the island free.

But LIME applies local, regional or national charges depending on which exchange a phone is connected to and the time that the call is made.

"We have repeatedly asked for direct interconnection to other mobile networks, but we haven't had any response," she said. "This has been going on for years."

The OUR issued a determination more than eight years ago calling on Cable and Wireless Jamaica, LIME's parent, to remove its transit charge, but only where it is not in a position to provide direct interconnection to its mobile network.

LIME denied that it had refused Flow's request, saying that it is preparing its network to offer direct mobile interconnection "in step with the finalisation of the OUR's rule making that will govern the process".

LIME also denied that it had failed to respond to Flow's overtures, saying that it had been in dialogue "on an ongoing basis about these and other issues".

The cost of calling from a LIME landline to a Flow phone is even higher than the other way around, at a retail price of $3.40 per minute. But LIME noted that this was due in part to the termination rate charged by Flow.

The company also stressed its commitment to competition, pointing to its voluntary surrender of its monopoly on services in the Montego Bay Freeport last month.

An OUR spokesman was unavailable for comment.

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