The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A cellular operator beating on the door to invest in the Bahamas has urged regulators to introduce mobile call termination rates prior to the sector’s liberalisation, arguing it will “enhance competition” when it arrives.

Emphasising that it was “very keen to invest in the provision of telecommunications networks and telecommunications services in the Commonwealth of the Bahamas”, Digicel said that implementing a ‘zero mobile termination rate’ would “conflict” with what the Utilities Regulation and Competition Authority (URCA) viewed as best for the Bahamas.

Analysing the historical background, Digicel said the absence of mobile (cellular) call termination rates in the Bahamas probably related to the Bahamas Telecommunications Company’s (BTC) long-standing monopoly and the ‘receiving party pays’ regime used in the US.

“Times are changing, however, and we believe that now is the time to bring mobile termination into line with the rest of the interconnection regime in the Bahamas in advance of full competition and in order to enhance that competition,” Digicel’s group head of regulatory affairs, Andrew Gorton, noted.

With BTC now required to publish accounting separation data, showing the costs incurred by each of its business lines, Digicel said the cost of transferring/terminating calls from mobile to fixed phones was now available.

“Therefore, in principle we do not see a basis for not arriving at a cost-based internal transfer rate for mobile termination when calls are made from BTC’s fixed lines to its mobile customers, or for an actual mobile termination rate when calls are made to BTC mobiles by other networks,” Mr Gorton wrote.

“Providing for a cost-based internal transfer would be consistent with [URCA’s] policy for optimal competitive outcomes as we understand it, and would be consistent with the existing regime in place for fixed to fixed and mobile to fixed calls.

“The best time to introduce such changes may be at the advent of competition in mobile, as in that event operators would be able to make much of the fact that subscribers no longer need to worry about being charged for receiving calls on their mobiles.”

And he added: “In contrast, by sticking to a zero mobile termination rate, [URCA] would, it appears to us, de facto be putting in place a regime for mobile termination which conflicts with [URCA’s] views on what is optimal for the Bahamas.”

Digicel said the “simplest approach” would be to make local cellular call termination rates equal, for the moment, with the 6.03 cents currently charged for international calls terminating on BTC’s network.

“In turn, this would enable mobile carriers in a competitive environment to avoid levying retail charges on customers for every call they receive,” Mr Gorton wrote.

“That does not mean that we believe international termination rates always have to be the same as domestic rates necessarily, given the retail pricing levels for calling the Bahamas from other countries.

“The standard pay per minute rate for a T-Mobile call from the US to the Bahamas is $1.99 per minute. In other words the US carrier’s revenue from the call is 3,300 per cent of the termination cost.”

Mr Gorton further argued that the introduction of mobile call termination rates in the Bahamas pre-competition would have “additional social benefits”.

He explained: “These include, for example, the fact that persons who may have limited finances but who want to be able to remain in touch with family and friends will still be able to do so, as friends and family will be able to pay for the calls made.

“Further, under a receiving party pays system, customers have an incentive to switch off their mobiles in order not to incur expenses which they are not able to control, and this can be avoided if termination rates are always paid.”