Fri | Dec 14, 2018

Free call apps blamed for dramatic fall in revenue of USF

Published:Thursday | September 13, 2018 | 12:00 AMErica Virtue/Senior Staff Reporter

A massive increase in the use of free social-networking applications has been cited as the main reason for a dramatic fall in the revenue of the Universal Service Fund (USF), which is mandated to provide Internet coverage for the island. The USF is financed by the cess charged on telephone calls originating overseas and terminating in Jamaica.

Eyebrows were raised at Parliament's Public Administration and Appropriations Committee (PAAC) meeting yesterday as it was disclosed that the USF would be spending $35 million in 2018 for an advertising and marketing campaign. This sum earmarked to be spent for the current period is the same as the amount expended last year, when there was a dramatic revenue plunge.

Violet Badroe, who represented the USF, said that the fund has been declining by hundreds of millions.

"We are very concerned about out declining revenues. We had budgeted, say, about a billion dollars for the year. But [what] we are experiencing now is just over 50 per cent of that. What is happening now is because of the intense competition in the marketplace. We are really concerned, and that is being looked at by the board," Badroe told the committee.

She said that last year's revenue was just below a billion, while in 2016, $1.3 billion was received. The projection for this year is about $750 million, she said. It was for this reason that the advertising budget was questioned.

"I know that there are declining revenues into USF largely because we were relying on voice calls for the revenues. People are now using WhatsApp. People are no longer using your regular lines to make calls. And a warning was issued to Government two years ago about this because your revenues now must be declining," said Paulwell, former minister of science, technology and energy and current PAAC member.

"Last year, we spent about $35 million. This year, we are spending about the same amount," Badroe told the committee.

Committee chairman Wykeham McNeill wanted to know what was being advertised.

"So, who do you advertise and promote [to]?" he asked.

"The general public," she replied.

"What are you selling?" he queried.

"Sir, we are selling the concept that we are a technological company and we provide Internet for Jamaicans," she said.