LIME readies to lower rates again
Published:Wednesday | January 30, 2013 | 12:00 AM
Telecoms provider LIME Jamaica will again slash mobile phone rates if the Office of Utilities Regulation (OUR) lowers termination rates by March.
At the same time, LIME has rejected comments by rival Digicel Jamaica that lower rates would stymie investment.
LIME previously indicated that it will invest US$12 million to upgrade its network arising from the influx of 150,000 customers attributable to its reduction in mobile rates during summer last year.
The OUR will make a decision by March on whether to further slash termination rates.
"For us, it can't happen too soon, because it will lead to the benefit of consumers," managing director of LIME Jamaica, Garry Sinclair, told Wednesday Business, adding, "we will pass the savings on to customers."
Bring down the rates
The telecoms market is one of the few industries in which core rates have fallen over time, despite inflation.
"We can bring down the rates in a market when everything else is increasing because they were already too high. The fact of the matter is that they were artificially high," he reasoned.
Call rates were lowered last summer based on the OUR setting an interim wholesale termination rate of J$5 a minute, down from J$9. It is set to determine a final rate by March.
It was a legislative quick fix to a near decade-long legal fight, and mobile providers slashed rates in response by up to two-thirds. The power to set the interim rate was granted to the OUR with the passage and signing of the Telecommunications (Amendment) Act 2012.
The OUR is currently in the consultation process on the Long Run Incremental Cost Model, which could result in even lower rates. LIME previously stated that it anticipates further reductions.
Digicel recently reasoned that if the OUR dropped the rates further, it would result in Jamaica offering the lowest global calling rates. The company said such reduction would disincentivise investment and eventually reduce the network size.
Digicel made the comments in its response to the OUR's 'Management Accountability Framework Business Plan and Budget', posted on the OUR website. The OUR countered last week by labelling Digicel's statements surprising and premature.