SMITH... balancing act

Angry cell phone users have accused the telephone companies of stealing their money, by placing on the market, phone cards with short life span, that often expire on unsuspecting users, even while there is still call-time on them.

"I am throwing away my Digicel phone," complained Carolyn, an obviously angry phone user, whose call to a Digicel operator about her card being expired, failed to produce the results she had anticipated.

MILLER... our time is generous

The Office of Utilities Regulation (OUR), the regulatory body for telephone companies, told the Business Observer yesterday that it was aware of public complaints about the short life span of some cards, but that such matters were not subject to regulation.

"We are aware of concerns by the public about the shortness of the period," said David Geddes, public relations manager at the agency. "I'm not sure it is a matter for the OUR. We, however, will let the market forces (take course) and it may make them decide to review the time frame for the cards."

Digicel says that a $100 calling card takes 14 days to expire from the day it was activated by the customer, and that a $500 card expires within 42 days of activation.

But the cell service provider explained that a customer who bought another card within a 60-day 'grace period' of the expiry date, could transfer the unused portion of the old card to the new one. In other words, after 42 days of activation, the only way to access the unused portion of a $500 card is for the customer to buy another card. After the 60-day grace period, the unused call time is lost forever. The customer's money is gone!

Cable and Wireless allows a longer life span for its cards, but provides only 30 days of grace period. After activation, its $100 cards last three months, while its $500 cards last six months before expiration. Within the grace period, the customer can reclaim the unused portion, but again as in the practice by Digicel, only after purchasing a new card to which the unused portion of the old card can be transferred.

But one angry Digicel customer whose complaint to the Business Observer triggered our calls to the phone companies for an explanation, said her telephone was primarily to receive calls and to make emergency calls. She was inconvenienced, she said, when she attempted to use her $100 card in an emergency during the recent heavy rains, only to discover it had expired.

But Digicel's marketing manager, Harry Smith, defends the practice, claiming that "this is a long enough time", and that anybody who did not utilise the system in the given time frame probably was not an active customer.

More fundamentally, however, Smith argued that an expiry date was a necessary feature, to force those who had been allocated telephone numbers to utilise the system.

"If we don't do that, you would be actually utilising a resource that someone else could be using in the system," he said. "It is a cost to us if we don't utilise the network and it is better that we give the units to active customers."

Cable & Wireless' public relations manager, Errol Miller told the Business Observer that having the expiry date was a common international practice and that the time frame allowed by his firm was relatively generous.

"It is a common international practice, but we try every effort to make it convenient for our customers," said Miller.

Digicel's Smith claimed that if the cards were embedded with unlimited time, the company would have to build a far greater excess capacity into its operation with implications for costs.

"It is a balancing act," he said. "If we extend the expiry date we have to increase the call rate."

But one analyst familiar with the cell phone operation, pointed out that the telephone companies themselves had a potential financial interest in customers buying phone cards, activate them without fully using them. This is because in such a scenario, the company would be guaranteed 100 per cent of that revenue, while it would have to share the revenue with its competitor if the customer uses the card to terminate a call in the network of the competing telephone provider.

Cable & Wireless pays Digicel $12 per minute each time a C&W cellular customer user calls a Digicel customer. On the other hand, Digicel pays C&W $7 per minute each time one of its customers calls into C&W's network.

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