Sun | Aug 20, 2017

OUR to legislate telecoms infrastructure sharing

Published:Friday | July 7, 2017 | 7:00 AM

The Office of Utilities Regulation (OUR) will force telecommunications companies to share their networks in the face of continued resistance at doing so voluntarily.

Legislation is to be drafted around September to set the terms under which telecoms share infrastructure, four years after a study commissioned by the regulator found that the reciprocal arrangements practised by large players could throw up barriers to market entry.

Globally, telecoms enter into sharing agreements as a means of reducing capital and operating expenditure, said the OUR in a notice of proposed rule-making.

However, in Jamaica, "there is some reluctance on the part of the telecommunications operators to engage in infrastructure sharing, which necessitates regulatory intervention," the regulator said.

It has now set September 22 as the date to submit drafting instructions to the Chief Parliamentary Counsel for legislation, following consultations with stakeholders, including Digicel and Flow, the island's main telecommunications operators.

Asked what steps it took before deciding to go the route of legislation, the OUR referred the Financial Gleaner to the notice of rule-making, pointing to the reluctance of operators to voluntarily agree to sharing, even after consultations.

One of the aims of the sharing rule is to promote fair competition through equal access being granted to the installation and facilities of operators on mutually agreed terms.

It is also meant to minimise capital expenditure on supporting infrastructure and free more funds for investment in core network equipment.

The Telecommunications Act empowers the OUR to make rules imposing on operators the obligation to share infrastructure.

"Sharing agreements have been scuttled after years of discussions when the operators involved realised they could not agree on the structure of the deal despite their conviction that a deal would likely reduce operating and capital expenditure," said the notice.

Infrastructure sharing primarily occurs where: one or more operators use the resources of other operators; where a group of operators agrees to share ownership and/or use of the network infrastructure; or where an operator uses the infrastructure of non-telecommunications entities such as power lines and ducts.

In Jamaica the voice network is ubiquitous, with a penetration rate for fixed and mobile of 124.28 per cent, but the availability of the data network is still mainly concentrated in urban areas where there is a penetration rate for fixed and mobile of only 61 per cent, the regulator said.

Based on research conducted on behalf of the OUR, sharing in the mobile sector is confined to passive infrastructure - that is, non-electronic and civil engineering elements of a public network such as rights of way or easements, sites, access to rooftops, buildings, towers, poles, ducts, shelters, equipment rooms, security, power, heating, ventilation and air conditioning - and is very limited.

The OUR noted that before Digicel acquired Claro in 2011, only 210 of the more than 1,400 sites were being shared.

It also said that the sharing of sites between operators was primarily being conducted on a reciprocal basis.

A review of sharing data conducted in early 2013 revealed that sharing was still being carried out in line with the reciprocal scheme as the number of sites owned by Cable & Wireless Jamaica (C&WJ) and shared with Digicel was equal to the number of sites owned by Digicel and shared with C&WJ.

Pygma Consulting, which was engaged by the OUR to conduct a study, highlighted that this type of reciprocal sharing would pose a serious barrier to entry for new entrants, who have not yet acquired a significant number of sites and therefore will not have any sites to barter.

mcpherse.thompson@gleanerjm.com