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Cell rates cut - Digicel Jamaica reduces prepaid charges across networks

Published:Friday | March 2, 2012 | 12:00 AM
Mark Linehan, CEO of Digicel Jamaica
Phillip Paulwell, Telecommunications Minister

Steven Jackson, Gleaner Writer

Cellular service provider Digicel has announced it is cutting its prepaid cross-network rates by roughly 35 per cent to $8.99, but customers must log in a code to enact the savings.

The rate slash occurs today, a day after cell customers lost the option of a third cell provider, Claro, following its acquisition and closure by Digicel.

Digicel prepaid customers must dial *155# then press 'send' to take advantage of the savings. Once activated, customers will pay the new rate to "any number, on any local network, at any time - with per-second billing", according to the Digicel release.

Digicel denied government coercion as the reason for the rate cut.

"No. This rate is something that Digicel decided to do as we are constantly trying to be innovative and create value for our customers," stated Mark Linehan, CEO of Digicel Jamaica, who avoided discussing the impact of the rate slash on its revenues.

"Digicel is a privately owned and operated company and, therefore, does not disclose our financials."

Locked in disputes

For years, Digicel, rival LIME, and their regulator, the Office of Utilities Regulation, remained locked in a series of separate legal and verbal disputes over rates.

Yesterday, the cellphones of LIME representatives rang without answer.

Telecommunications Minister Phillip Paulwell commended Digicel for cutting its rates. He reasoned that the drop came within the context of last month's negotiations between the telecoms players and himself, but added that this rate drop was Digicel's own initiative.

"Digicel has done the right thing," he told The Gleaner last night. "I commend any action that is to the benefit of consumers and as such I commend Digicel for this."

He added: "It indicates that competition is back up again."

Paulwell then noted that a third telecoms player would eventually enter the market to increase consumer choice, but stressed that he could not yet give a timeline.

Golding's requirement

Specifically, Digicel to LIME mobile rates were $14.20 and $13.80 during peak and off-peak periods, respectively, as at January 2012. Interestingly, that rate stood even higher at some $17 a minute in late 2011, but was cut as a requirement of then Prime Minister Bruce Golding to approve the Claro acquisition.

However, the reduction was insufficient for then government member Karl Samuda and Paulwell, then opposition spokes-man on telecommunications.

LIME tried to legally block the Claro-Digicel deal in the Supreme Court but continues to appeal the ruling. Digicel holds a commanding market share of more than two million customers.

On Valentine's Day, Paulwell revealed that after three weeks of talks involving Flow, LIME and Digicel, the parties agreed 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. However, no agreement was made in regard to interconnection rates.