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Leveling the Playing Field

LIME Jamaica
January 2012
Background
The Telecommunications Act came into effect in 2000;
The Act had only been intended to subsist for 3 years, after which a
new law and a new regulatory framework was to be promulgated.
Under the Act LIME was heavily regulated in order to assure growth
of competition;
The existing regulatory framework continues to regulate LIME as
the incumbent /former monopoly under outdated legislation despite:
a) LIMEs significant loss of customers and market share,
b) Competitor's significant voice market power (SMP),
claims over 2 million, customers, representing in excess of 80%
market share. Notwithstanding this clear market dominance,
competitor is unregulated.

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Competitor
offers LIME
fixed line
customers a
lower calling
plan for calls
to their
network than
LIME can
offer
NOBODY
KNOWS:

1. They set our
retail price
2. They set the
cost of calls to
their network
3. They are
charging retail
rates to our
customers
cheaper than
they are
charging LIME
to terminate
Our Competitor contends
Hasn't changed its rates (interconnection/retail) for 11 years:
Calling rates have been steadily declining worldwide and LIME
and Claro reduces rates significantly. Competition able to
operate without lowering rates, a clear sign of dominance.
Telecoms sector healthy and regulation has been effective:
Worlds richest man in telecoms across the region has retreated
from the market..resulting in reversal of the gains from
liberalization;
LIME business model weak, cannot be looking for the government
to solve their problems through regulatory regime change:
The regulatory changes that LIME recommends are for the
benefit of all consumers and reflects the best practice all over
the world. Jamaica cannot afford to be left behind. Time come!


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Target Regulatory Environment
Promotes fair and open competition
Ensure fair and equal treatment of all service providers
Ensure that all service providers have an equally unimpeded ability
to respond swiftly to changing market conditions and consumer
needs
Encourages providers to invest and get a fair return on
investment
Provides consumers with more choice
Maximize customers access to service providers
Maximize service providers access to customers
Predictable laws and regulations
Technologically neutral
Ensures fair and timely access to necessary public
resources

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A Level Playing Field
Emergency legislation to be passed which facilitates immediate intervention by the
Minister/Regulators:

Appropriate regulation of the Super Dominant Carrier;

Fixed to mobile rates paid on a per second basis in keeping with all other
interconnection rates.

Mobile termination rate not less than $1 and not more than $5 (FTM and MTM).

Reciprocity of mobile termination rates between operators.

Parity of on net and off net retail mobile to mobile rates.

Where a mobile operator offers a termination rate lower than another mobile
operator is willing to accept. The operator charging the lower termination rate is
permitted to charge a lower on net rate which will not be less than the lowest rate
it has offered for mobile termination on its network.

Tower Sharing: Cost -oriented rates ; Access to towers and land around the towers
rather than a swap arrangement.

Local Number Portability

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Judicial Review
LIME applied for and was refused permission to seek
Judicial review of the approval of the Digicel/Claro merger

LIME will be appealing the refusal on January 30
th
, 2012.

The claim is for a declaration that the Prime Minister
unlawfully and improperly exercised his powers in granting
approval of the transfer of Claros licences to Digicel

In addition LIME sought an order compelling the FTC to
exercise its powers under the Fair Competition Act
including seeking injunctive relief against Digicel and Claro

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FTC Suit
The Fair Trading Commission (FTC) filed suit against Digicel and Claro
They have asked for a declaration that Digicel and Claro have breached the competition
statute by giving effect to an agreement which has as its purpose, or likely the effect,
substantial lessening of competition
The FTC has also asked that the court in the alternative declare sections of share
purchase unenforceable; an injunction restraining the parties giving effect to the
agreement ;and a fine not exceeding $5m Jamaican dollars for each breach.
The FTC claims that Digicels pricing strategy diverts revenue from its competitors by
discouraging its subscribers from connecting to other networks.
The tariff structure utilized by Digicel constitutes a high barrier to entry and expansion to
other competitors.
The FTC further claims that the voice and text messaging services in Jamaica is likely to
suffer irremediable and irreparable damage and harm. In particular:
-Higher prices and /or reduced promotions
-Fewer choices of products
-Low product quality or customer service quality
-Slower rates of technological innovation or adoption

First hearing date 31
st
January, 2012.
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Leveling the Playing Field
LIME Jamaica January 2012
TIME COME!