The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.et

The Bahamas Telecommunications Company’s (BTC) chief executive yesterday said he was “quite aware” of the $243,000plus fine slapped on the company by the Utilities Regulation and Competition Authority (URCA), but declined to comment further.

Leon Williams said: “I would rather wait until I sit down with the regulatory team, the legal staff at BTC to make a formal comment on the URCA findings. I am quite aware of it.”

URCA determined that BTC breached the Communications Act through the exclusive supply agreements it reached with its phone card wholesalers, which prevented them from selling cards issued by competitors such as Cable Bahamas and its Systems Resource Group (SRG) subsidiary.

Kathleen Kathleen Riviere-Smith, URCA chief executive, said the decisionhad originated from an April 2012 complaint to URCA by Cable Bahamas, which alleged that BTC had engaged in anti-competitive business practices that contravened sections 67 and 69 of the Communications Act.

“SRG had called several wholesale businesses with the view to them selling SRG’s IndiGo calling card. The wholesalers advised SRG that they had executed exclusive supply agreements with BTC prohibiting them from selling the SRG calling cards. As a result of this, since March of 2012 SRG has been unable to distribute its cards through some wholesalers as a result of the wholesalers’ exclusivity agreement with BTC,” said Mrs Riviere-Smith.

She added that following a detailed investigation by URCA it was determined that the exclusivity agreement BTC has with its master distributors breaks the law.

“The exclusivity supply terms of BTC’s Master Distributor Agreement, which requires buyers not to distribute products and services from any other carrier that offers phone services in the Bahamas, has the effect of preventing, restricting or distorting competition such that it appreciably affects trade in the Bahamas,” the URCA chief said.

“BTC is a dominant in the market for the upstream supply of calling cards for long distance two stage dialling. It is also dominant in the marker for the retail supply of long distance two stage dialling services.

“The conduct which is the subject of this adjudication is conduct which amounts to an abuse of a dominant position because it is a single branding agreement which has the affect of preventing, restraining and distorting competition.”

BTC has been ordered to cease and desist from any conduct or behaviour deny ing future market access to potential competitors in the relevant market for two-stage long distance calling cards.

BTC has also been ordered to immediately amend the Master Distributors Agreement by deleting the violating provisions, and submit to URCA within 14 calendar days of the issuance of the order a draft copy of the changed agreement for approval.

BTC has also been ordered to pay a fine of $243,442.76 no later than 30 days after the issuance of the order. Failure to pay the fine might result in a further fine not exceeding 10 per cent of the company’s relevant turnover or other penalty determined by URCA.

Stephen Bereaux, URCA’s director of policy and regulation, said: “The purpose of the fine was to ensure that conduct of this sort, which is harmful to competition is not repeated or doesn’t take place in the market, so it is intended obviously to remove the incentive for operators to engage in anti-competitive behaviour.

“URCA was keen to ensure that consumers receive the full benefit of the competition we do have in the sector, and going forward when additional competition is introduced.”