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Digicel accuses LIME of playing the victim

Published:Friday | February 17, 2012 | 12:00 AM
Mark Linehan
Garfield 'Garry' Sinclair

Mobile phone company Digicel Jamaica has accused LIME Jamaica of grossly understating its customer base by close to half in order to influence regulations aimed at cutting interconnection rates.

LIME has said its active cellphone customers stood at 290,000 but on Wednesday, Digicel with some two million subscribers said LIME had more than half-million active subscribers, and accused its rival of waging a "misinformation campaign".

"We can only assume that LIME has resolved to engage in a concerted misinformation campaign as a means to try to get its own way, and perhaps this explains all the recent talk of LIME suggesting that it is considering pulling out of Jamaica," said Digicel Jamaica CEO Mark Linehan in a written comment Wednesday.

"Secondly, LIME's CEO has repeatedly misrepresented to the media, and by extension the Government and its shareholders, LIME's mobile subscriber base by indicating that it only has circa 380,000 mobile subscribers (of which they say 290,000 are active), when in truth we know, based on credible market data, that LIME has in excess of 500,000 active mobile subscribers."

LIME did not dispute Digicel's claim when asked for comment, but chose to reiterate its push for legislative action.

"Our focus remains squarely on the issues that are of consequence and as such we are greatly encouraged by Minister Paulwell's recent announcement which emphasised his commitment to passing the emergency legislation immediately," said LIME Jamaica managing director Garry Sinclair on Thursday.

"This is our paramount focus as it will deliver true value for consumers in a market where the super dominant player operates unfettered with an over 75 per cent market share," he said.

Digicel said its estimate of LIME's customer base is based on information relating to the unique numbers of each interconnecting network operator. "Each unique number represents a unique customer," Digicel said on Thursday.

"Our records indicate that at the end of January, there were over 500,000 unique LIME subscribers calling the Digicel network for the month of January."

Sinclair is pushing for the minister responsible for telecoms or the regulator to set new interim rates for the sector until an agreement is reached on more permanent rate structure, saying it pays Digicel 7 US cents to terminate calls on its network, whereas Digicel pays it 1 US cent per call.

Sinclair says LIME is lobbying for a sliding scale of J$1 to J$5 for mobile to mobile rates, and about J$6.50 for cross-net rates.

Digicel said it remains steadfast in its commitment to working with the Government, regulatory bodies and fellow telecoms operators, in "ensuring the best interest of Jamaican consumers is served".

The telecoms said at a meeting organised and facilitated by Phillip Paulwell's ministry on February 7, it was asked to explain to LIME how payments made under the fixed to mobile system operates, "which LIME previously clearly did not understand".

On Tuesday, February 14, ICT Minister Phillip Paulwell said after three weeks of talks involving Flow, LIME and Digicel, the parties agreed broadly to the introduction of local number portability for both fixed and mobile networks; establishment and resourcing of the single telecommunications regulator; and a review of the universal service obligation to make broadband services more easily accessible.

Digicel, whose position on number portability has been unclear, now says all three "issues will serve to enhance the telecoms landscape".

There was no agreement on interconnection rates only a framework on which an eventual deal could emerge.

Its understood that the Office of Utilities Regulation has proposed an interim rate of J$5.

LIME is pushing for Government to move immediately to pass and enact the emergency legislation already tabled to get rates down in the interim while the parties agree a final position on cross-network charges.

The legislation proposes that the interim rate structure would stay in place for no longer than a year.

Sinclair has blamed Digicel's dominance of the mobile market for its underperforming mobile business segment, which is a primary contributor to losses racked up by the Jamaican operations over four to five years.

LIME has reported losses of J$3.8 billion this year already for the nine-month period ending December 2011.

"Our business continues to operate under challenging circumstances, in particular an unfavourable regulatory regime which continues to afford our major competitor a distinct advantage while hampering our operations," said LIME in its financials released this month.

A decade ago, start-up Digicel overtook former monopoly LIME as mobile market leader of the newly liberalised telecoms sector. Currently, the mobile market stands at 2.9 million subscribers.