Twomey... OUR's slowness preventing expansion

Eager for a for a bigger slice of Jamaica's $50-billion a year telephone market, call routing companies are concerned about what they say is a delay by the industry's regulator to settle the rates at which they can land calls from foreign carriers to domestic telephone networks.

The Office of Utilities Regulation (OUR) has promised new rates by month-end after it reviews public responses on the matter, as well as legal advice. But the routing companies suggest that they are not only constrained but that consumers are also losing out.

The absence of a settled rate allowed the big network owners to charge "whatever they want" for allowing calls onto their networks from the routing companies, these firms complain.

"It is preventing us from getting investors to expand the service which we offer," said Steve Twomey, the chief executive of one of the routing companies, Reliant Enterprises, and key spokesman for the lobby group, Jamaica Competitive Telecommunications Association (JCTA).

J Paul Morgan, OUR's director-general

Paradoxically, the JCTA had gone to an industry review tribunal to test the OUR's right to prescribe a settlement rate after the watchdog agency had, in January, imposed a formula that gave the routing companies a $0.3 (three cents) margin on each call they landed in Jamaica. Prior to that, JCTA members charged the foreign carrier what they considered was necessary to get the business and negotiated their margins with the domestic networks.

With the OUR's arrangement, the routing companies could get about US$0.8 (eight cents) for each call they landed from a US carrier onto a domestic network. The network owners could charge up to US$0.5 (five cents) to transfer the call.
Although the tribunal threw out JCTA's appeal, the OUR in February announced that it would withdraw the rates while it reviewed the arrangements.

The OUR has announced that Jamaican call routers can negotiate the rates they charge foreign carriers, but reserved a ruling on the settlement rate between the routing companies and the domestic networks.

The OUR, when it initially announced the rate policy, had said that it intervened in the market in an effort to protect Jamaica's foreign exchange inflows after big drops in the face of moves by the US Federal Commununications Commission (FCC) to drive down the rates foreign telephone operators charged US carriers to terminate calls.

But Twomey now complains that with the long hiatus, the domestic networks can charge the routing companies whatever they wish to terminate calls, with the potential for slicing their margins, making them uneconomic and thereby pushing them out of business.

With the demise of these middlemen, the big operators would have the entire business to themselves, JCTA members fear.

"It is not putting consumers in a position to take advantage of the services offered," Twomey said, in relation to the OUR's delay.

JCTA was established earlier this year by the mainly smaller players in the telecoms sector as a counterfoil to what they considered the power and influence of the big companies.

Ironically, it lumps Digicel, the Irish-owned major player in the mobile phone market, in the same category as Cable & Wireless. Three years ago, it was Digicel who, as the pesky upstart, was making similar complaints about Cable & Wireless in the early stages of the deregulation of Jamaica's telecoms sector.

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