Competition in Jamaica’s telecommunications sector is making it easier for more people to say, “Talk is cheap.” Now, more than ever, more people will likely to do what Roger Clarke once advised: “Use one telephone to call the other”. However, one should resist Clarke’s advice as it could “cost an arm and a leg”, using one phone to call the other.

LIME fired the first salvo in the latest battle of the telephone titans. It exploited an opportunity created by the Office of Utilities Regulation (OUR) and lowered its mobile rates from between 40 and 62 per cent. LIME not only cut its pre-paid and post-paid “cross-network” rates from $12 to $6.99, but it also reduced the per-minute charge on its “on-network” plan from $8 to $2.99 and $1.99 on pre-paid and post-paid calls respectively.

LIME’s substantive actions sent shivers down Digicel’s spine, causing it to “tremble like when guinea pig call”. Although Digicel initially fussed and fumed, it eventually responded with rate cuts of its own. The company announced that its mobile customers would begin to pay $2.89 per minute for calls made from Digicel to Digicel lines. When implemented, this would be 10 cents less than what LIME charges its customers. In addition, Digicel’s “cross-network” rates will move to $6.99 per minute and customers could also benefit from free talk, text, international minutes, and night-time discounts.

Instructively, these reductions in mobile rates followed on the heels of the Office of Utilities Regulation (OUR) changing the interim wholesale and retail telecommunication rates from $9 to $5, with an effective date of July 15, 2012. But as with any open market, Digicel has decided to test the OUR’s actions in court. It is now seeking judicial review of the OUR’s actions.

Essentially, the company is claiming that the OUR’s move to adjust the interim wholesale and retail telecommunication rates is “contrary to the common-law right of natural justice”. Furthermore, it is apparent that Digicel believes that the OUR denied it its “rights and legitimate expectation” that the OUR ought to comply with the inherent principles of due process and procedural fairness when making these kinds of decisions.

In other words, Digicel appears to be saying that the OUR should have had consultations with Digicel before changing the rates. But be that as it may, Digicel is also claiming that the OUR does not have the requisite powers to “set interconnection rates”, even though the regulatory agency is a creature of Parliament. I am sure the lawyers will evaluate the merits and demerits of the case and hopefully the clients will be advised sufficiently ahead of the matter being called up in court — Jah know, anything that can be done to avoid tying up court resources should be done.

Yet, besides the legal tug-of-war that might ensue, customers of both companies are having the best of both worlds and rightly so. This is one of the positive spinoffs of having competition. Lower price is not the only benefit of free market competition; improved service is another outcome. Gone are the days when monopolies ruled and customers were forced to pay for inefficiencies.

It is ironic, but I recall how resistant many people were to the government’s decision to break up the monopoly that Cable and Wireless once enjoyed. Now they are reaping the sweet rewards from those actions. Something tells me that this will not be the end, but the beginning of more discounts because, as Minister Paulwell asserted upon resuming ministerial responsibility for the telecommunications sector, more providers will be invited to participate in this multi-billion dollar industry. Consequently, consumers could be king in determining the quality service they receive and the ultimate price they pay.

It is for those reasons and more that the government should redouble its efforts to break up the virtual monopoly that the Jamaica Public Service Company (JPSCo) now enjoys on electricity delivery. It may take a tidy sum of money to address some of the contractual breaches which may become evident as the process of opening up the energy sector gets into high gear. It could also expose some of the bad decisions that were made in consummating the sale of JPSCo, but we cannot continue under the present circumstances — not from a service-delivery standpoint, and definitely not from a cost perspective.

Cheaper, multiple sources of production, transmission and delivery of electricity, aided by innovation, will redound to Jamaica’s credit. This will certainly help small, medium and large players in the productive sector, particularly manufacturers. Lower utility costs, especially electricity cost, could lead to substantial increases in overall competitive indices. Simply put, the current cost of electricity, as a per cent of total production cost is unsustainable and counterintuitive to economic growth.

But let’s go back for a moment to cheaper mobile call rates and how these lower rates should impact our personal economies. While cheaper call rates are good, they also provide an opportunity for reducing overall telephone expenses. Unfortunately, however, many people use these cheaper rates to talk more, even though maintaining current call volume could free up additional savings that could go toward paying credit card bills, buying school books, computers, investments, etc.

Some people are already going crazy over the cheaper rates from Digicel and LIME, and although it is certainly not my place to dictate how consumers organise their spending priorities, it is about time we become financially conscious about wealth creation and retention, and start comparing the opportunity costs of foregoing certain things vis-à-vis making other decisions – decisions that could return higher rates of return. There is little value in calling someone abroad, or locally, just to tell them, “Hey, this dog is chasing a car, I bet you any money when it catches the vehicle, it will likely pee on the tyres and then cry woof-woof.”

Burnscg@aol.com