The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Cable Bahamas has urged regulators to protect consumers and a “competitive level playing field” by preventing BTC from choosing the payment regime for calls terminating on its network.

The BISX-listed communications provider, which will own a 48.25 per cent interest and have management rights for the Bahamas’ second mobile provider, warned that regulatory intervention was necessary to prevent the Bahamas Telecommunications Company (BTC) from leveraging its market dominance.

Cable Bahamas’s concerns on behalf of NewCo, the yet-to-be-named second mobile operator, were laid out in response to the Utilities Regulation and Competition Authority’s (URCA) consultation on proposed changes to BTC’s access and interconnection (RAIO) regime.

It called on URCA to mandate that BTC provide interconnection between its network, and that of NewCo’s, within 30 days of the latter submitting such a request.

While acknowledging that this was key to ending the Bahamas’ last communications monopoly, Cable Bahamas indicated it was more concerned over whether BTC will have the freedom to select its own mobile termination payment regime.

“BTC should not be allowed to unilaterally determine whether a Calling Party Pays (CPP) or Mobile Party Pays (MPP) regime should apply for calls terminated on its mobile network, as this will allow BTC to exert the significant market power (SMP) it has in relation to termination of mobile calls on its mobile network,” Cable Bahamas urged.

“BTC’s choice will not necessarily be in the best interest of consumers in the Bahamas, and it will not necessarily contribute to establishing a level competitive playing field given BTC’s SMP in key markets relevant to this assessment, namely fixed-voice origination together with mobile origination and mobile termination.”

Cable Bahamas said BTC’s ‘freedom of choice’ when it came to call termination payment methods, as the proposed changes to its RAIO seemed to imply, would likely force Cable/NewCo to adopt the same.

“NewCo requests that in the event that BTC and NewCo fail to agree on the regime that should be adopted in the market, URCA immediately intervenes using the remedies as its disposal due to BTC’s significant market power in the termination of mobile calls and, indeed, in all mobile markets as well as in the origination of fixed calls to mobile, and removes BTC’s unilateral power to decide on a CPP or MPP regime,” Cable Bahamas told the regulator.

Describing what it termed as “the main threats to healthy and sustainable competition in the mobile telecommunications market”, Cable Bahamas said BTC could use an MPP regime to employ “price discrimination” against NewCo customers.

It said BTC could charge its mobile customers for receiving calls from NewCo clients, but not from other BTC customers.

“Charging a BTC mobile customer a higher price to receive a call from a NewCo subscriber than from another BTC mobile subscriber would constitute price discrimination,” the BISX-listed communications provider argued.

“As a result, BTC mobile customers would be more likely to reject incoming calls from NewCo than from a BTC mobile.

“As the main purpose of such a measure would arguably be to make NewCo’s service offering unattractive without NewCo being able to respond specifically to an issue resulting from BTC’s market dominance and entirely outside NewCo’s control, the price discrimination would be undue and anti-competitive.”

As for a CPP regime, where the calling party pays, Cable Bahamas argued that BTC could charge its clients a price below the mobile termination rate for calls made to other BTC customers.

“A further major threat to the development of competition could be the choice of inefficient and unreasonable MTRs (mobile termination rates), possibly obtained after lengthy, resource-intensive processes that can further hamper the timely launch of NewCo to provide effective competition,” Cable Bahamas warned.

“NewCo understands that prior to the launch of its mobile network services to customers in the Bahamas it will have to make the choice as to whether to apply the CPP or MPP regime to calls terminated on its mobile network.

“In addition, it will need to determine the prices it will charge to its customers for off-net calls that will terminate on BTC’s mobile network.”

Cable Bahamas, though, said itself and NewCo had been unable to determine the payment regime and prices they wanted to charge clients.

It explained that they had been prevented from doing so because BTC had neither decided upon its mobile call termination payment regime, nor the price it will charge NewCo for terminating the latter’s calls on its network.

“As an SMP operator, BTC has a recognised potential to engage in anti-competitive practices,” Cable Bahamas argued.

“This potential, in conjunction with BTC’s possible lack of alignment with consumer and market interests, makes a unilateral decision by BTC regarding the call termination regime extremely risky with regards to the development of effective competition in the mobile sector.”

It added: “BTC’s option to decide the charging regime for call termination on its own network unilaterally implies an information asymmetry: BTC will know ahead of NewCo which termination regime will be applied. This information asymmetry is not conducive to fair and effective competition.”