Harry Smith

CABLE & Wireless could gross upwards of $200 million per year, from the charge it recently imposed on calls to its directory assistance, if Jamaicans continue to call on the service at the current rate.

But the telephone firm, rejecting an argument made by its competitor, Digicel Jamaica that profit was the motivation behind the charge, insisted yesterday that despite the fee, C&W would continue to lose money from the service.

Errol Miller

"The actual cost of the service is more than the cost being currently charged, so we are still operating the service at a loss," Errol Miller, communications manager at C&W told the Observer yesterday. Miller declined to spell out for the Observer, the cost of the service.

But he suggested that the idea was to choke off the demand for the service to allow the telephone company to be able redeploy its resources in a way that was more efficient to its bottom line.

"It is not a charge that customers have to endure," he insisted. "It is an unnecessary charge, because between 90 to 95 per cent of the numbers that they are searching for is already in the phone book and we provide the books free of cost."

However, Digicel Jamaica, Cable & Wireless' competitor with which it shares an acrimonious rivalry, tagged the new fee as an attempt by C&W to recoup revenue loss from the rebalancing of international call rates.

Last month C&W introduced an $18 per minute rate for all international calls, bringing down the rates from as high as $70 per minute, and by an average of 25 per cent. Though it simultaneously increased local rates by 66 per cent, some industry experts believe that the net effect could be an overall shrinkage of its revenue base.

This view was implicit in the argument of Harry Smith, Digicel's marketing manager, who saw profit motive behind the move.

"We at Digicel have not rebalanced any of our services when we offered our international service," Smith told the Observer.

Smith complained that Digicel was charged up $30 per minute by C&W for providing directory assistance service to its customers -- a fee which he said could not be fully recovered from what Digicel in turn billed its customers.

"C&W charges us (Digicel) to use their service," he said. "On peak periods Digicel is charged $30 and during off hours the charge is $20, and we charge an average of $25 to our customers."

Digicel Jamaica Ltd, started operations 18 months ago and now has some 600,000 customers.

But that company is now in court over the high fee that it charges the other two players in the market -- C&W and Centennial -- for terminating their calls into its system. The rate it charges is above the maximum that the Office of Utilities Regulation (OUR) allows.

Currently, between 40,000 and 60,000 calls are made each day from both fixed line and mobile phones to C&W's directory assistance. That service was free until December 1 when the charge of $10 was levied on each call from a land phone and $20 for each call from a cell phone.

It therefore means that if Jamaicans continue to call at the average rate of 50,000 per day, at an average cost of $12 per call, C&W could gross around $600,000 per day from the service.

But Miller pointed out that customers were allowed three free calls per month and that "persons at call-boxes will not be charged because we know that the phone books are stolen in the boxes".

C&W enjoys a virtual monopoly in this area of the business because it is still the only company with a land-based phone system with listed numbers. The company has some 500,000 land lines.

Miller told the Observer that the new fee was also a necessary preparation for the onslaught of land-line service competition. C&W previously had a 50-year monopoly on Jamaica's telecoms market, but negotiated a three-year transition to liberalisation, which ends next March, when competitors will be allowed to bypass its network for international calls.

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