The Fair Trading Commission (FTC) has issued a report which charges telecommunication providers Digicel of having an unfair pricing strategy, harmful to competition and consumers.

The report follows investigations into complaints by Cable & Wireless Jamaica, which trades as LIME, that Digicel was acting anticompetitively by charging LIME a wholesale rate for calls from LIME landlines to Digicel mobiles which was as much as 62 per cent higher than the retail rate Digicel charges its own landline customers to call the same phones. LIME alleged that the “price squeezing” by Digicel made it impossible for LIME to lower its landline to mobile retail rates to compete fairly against Digicel.

After almost one and a half years of investigation and analysis including information obtained from LIME, Digicel and the Office of Utilities Regulation (OUR), the FTC on Thursday said, “Based on our review of the matter, we conclude that Digicel’s conduct is likely to substantially lessen competition and harm consumers in the fixed and mobile voice services market in Jamaica”.

The FTC in its report said the most effective corrective action would be to alter the regulatory environment in the industry “to remove Digicel’s undue influence over the price of its rival’s voice services”, but because this may take considerable time, also recommended Digicel take the initiative to change its pricing.

LIME in a press release on Friday said it considers the FTC Report a vindication of its allegations that Digicel “has long left behind its pro-competition stance, and has been abusing its dominance to the detriment of the Jamaican consumer.”

Geoff Houston, LIME’s managing director for Jamaica and Cayman said, “LIME is extremely pleased that having waited so long for a ruling, the FTC has found in our favour, and in the interests of Jamaican consumers. We will immediately be seeking the assistance of the Court in implementing these recommendations in the short term, and will also approach the OUR and the Office of the Prime Minister in respect of the medium term recommendations.

“It is absolutely important that Jamaican consumers and policymakers recognize that Digicel’s pricing in several cases is preventing LIME, and possibly other providers, from providing lower rates to customers in these harsh economic times and the situation needs to be resolved in a timely manner,” he added.

However, Digicel in response to LIME, accused that firm of making a “final desperate attempt to cling on to the last piece of its monopoly in the telecoms market in Jamaica”.

“So, once again Cable & Wireless is claiming victory for customers when in reality all this ruling does is assist Cable & Wireless in maintaining its stranglehold on the business fixed line market,” said Richard Fraser, head of legal and regulatory affairs for Digicel Jamaica, in a press release.

Fraser added: “Our objective has simply been to introduce competition to the business fixed line market – in the same way that we revolutionised the mobile industry – and break the monopolistic behaviour of Cable & Wireless. It’s simple really. Cable & Wireless is happy when it is fleecing customers – yet when its position is challenged by another provider with a superior offering, it cries foul.”

Fraser said he wished to highlight the following points:

. This ruling relates only to Digicel’s business fixed line services which we launched a few years back to challenge Cable & Wireless’s monopolistic stranglehold on that market

. Cable & Wireless refused to agree interconnection for 18 months prior to the launch of Digicel’s business fixed line service – resulting in business consumers being denied choice and true competition

. When Digicel finally started to make inroads into the business fixed line market, Cable & Wireless lodged a complaint despite the fact that it continues to control upwards of 95 per cent of this market

Digicel has not yet stated whether it will act on the FTC’s reccommendations.