Wed | Nov 14, 2018

FLOW to hike rates March 1 - Appeal over termination charges ongoing

Published:Friday | February 9, 2018 | 12:00 AM

Cable & Wireless Jamaica, which trades as FLOW, has told customers to expect monthly rate increases in 35 of its residential fixed line and broadband services, effective March 1.

The telecom links the increases to investment in the network to provide LTE mobile technology, high-speed broadband and sophisticated television services, but it also comes amid a fight with its regulator over adjustments to termination rates that would serve to reduce earnings for FLOW in its fixed-line phone segment.

LTE, or long-term evolution, is a 4G wireless communications standard designed to provide up to 10 times the speeds of 3G networks for mobile devices, including smartphones and tablet computers.

Financial Gleaner calculations of the new rates posted on FLOW's website indicate that the increase will range from a low of 5.3 per cent for fixed-line services to a high of 21.4 per cent for broadband, with variations in between.

FLOW said the investment in its network also means that more Jamaicans, particularly those in parts of rural Jamaica, will now be able to access advanced services.

"As we upgrade and expand our network across the island, it also means building the capacity for future innovative services and products that will further connect communities and transform lives," the telecoms said.

Meantime, the Office of Utilities Regulation (OUR) confirmed that the first reduction in termination rates was implemented last December 1.

The OUR, responding to Financial Gleaner queries, said the Telecommunications Act requires that all dominant public telecommunications carriers permit interconnection of their public network with the public network of other carriers.

Following several rounds of consultation, the OUR approved inter-connection rates associated with fixed networks and determined that they should be implemented on a glide path. The second and final round of reductions is due for implementation on April 1.

FLOW, as the dominant player in the fixed-line market segment, had been pushing for a longer glide path of at least two years.

Termination or wholesale rates represent charges between interconnecting carriers and may be a component of the retail rate ultimately paid by customers, the OUR said.

However, it said that since retail rates are not regulated, it is at the discretion of the telecoms whether to reduce call charges to customers resulting from lower interconnection rates.

The regulator shied away from commenting directly on the expected impact of its rate decision on consumers, saying the matter was being appealed before the Telecommunications Appeal Tribunal.

FLOW Jamaica declined to comment on the status of the appeal and how long it anticipated the tribunal would take to make its determination.

"We will reserve our comments at this time," said Director of Corporate Communications and Stakeholder Management Kayon Wallace.

The tribunal, as stipulated by law, consists of three members appointed by the minister in charge of telecommunications, one of whom must be a former judge of the Supreme Court or the Court of Appeal who will act as chairman; one recommended by the Jamaica Telecommunications Advisory Council, a 5-9 member body on which FLOW is represented; and the other recommended by the Consumer Affairs Commission.