KINGSTON, Jamaica – LIME Chairman Chris Dehring has welcomed the lowering of the Mobile Termination Rate (MTR) as “fantastic news” for the company and Jamaican consumers.

The Office of Utilities Regulation (OUR) yesterday reduced the MTR to $1.10 per minute, effective July 1, 2013, from the current interim $5 set last year. This significantly reduced rate is great news for mobile users, easing the burden on consumers, while encouraging competition within the mobile phone market, said Dehring.

“If the OUR does what it says it will do, and the Government does what it says it will do, the lowering of the rate is fantastic news for us and Jamaican consumers,” said the LIME chairman in a statement yesterday.

Noting that it has been a long process, Dehring said, “This started in 2004, and when Garry (Sinclair) and I joined LIME we made a concerted effort to lobby public opinion to get the MTR rate down.”

Dehring said the cost-based the Long Run Incremental Cost (LRIC) model used to determine the MRT is appropriate in regulating the dominant mobile operator, which is now Digicel.

“The LRIC model is an internationally accepted way of arriving at an appropriate MTR, which is a base rate from which we can cost our services and give value to our customers,” he said.

However, according to LIME, the eagerly awaited ease for mobile customers could be derailed by lobbying to “phase in” the reduced rate because of the impact it may have on revenues and lowering taxes at a time when International Monetary Fund targets hinge on increased revenue into the coffers.

On the contrary, rather than impacting negatively on taxes to Government, the reduction in the MTR will have the opposite effect, LIME argued.

“We at LIME believe that the OUR, nor the Government has anything to be afraid of as the rate reduction will add to the disposable income of mobile users, which then becomes available for use on more of the same or other products and services, all of which attract General Consumption Tax,” the company said.

Figures show a substantial increase of $904 million in tax paid by LIME, after the reduction of the interim MTR to $5 last year. The company said the significant lowering of its retail rate after the MTR reduction resulted in an increase in call volumes and customer spending on the LIME network.