The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Regulators are proposing that the Bahamas Telecommunications Company (BTC) change its standard interconnection offer to rival carriers to facilitate upcoming mobile market competition.

The Utilities Regulation and Competition Authority (URCA), in a newly-released consultation document on the proposed changes to BTC’s Reference Access and Interconnection Offer (RAIO), wants the incumbent to allow rivals to link directly with its mobile network.

“Under the terms of BTC’s current RAIO, BTC does not allow other licensees to establish direct points of interconnection with BTC’s mobile switch,” URCA said.

“Instead, other licensed operators must buy national transit services from BTC to terminate calls on telephone numbers assigned to BTC’s cellular mobile network.”

While this acts as a potential barrier to competition, URCA said there was no need to address the situation until mobile communications were liberalised - as they are now.

“With the advent of a second cellular mobile operator in the Bahamas, URCA is now of the preliminary view that direct connectivity to BTC’s mobile switch may be appropriate and required to achieve fair and efficient entry in the cellular mobile market,” the regulator said.

“Cable Bahamas commented that BTC has been dismissive of previous requests by SRG [Cable’s subsidiary] for this particular service.

“URCA is not aware of any barriers that would render it unfeasible for BTC to fulfil such a service request from other licensees. Indeed, URCA is of the view that access to BTC’s mobile switch would be a reasonable obligation placed on BTC....”

URCA added: “URCA understands that it is commonplace for an entrant to be able to connect directly to an incumbent’s mobile network, and believes that the situation should not be any different in the Bahamas.

“URCA [previously] did not mandate BTC to provide direct interconnection with BTC’s mobile switch because, in part, it anticipated there would only be relatively low interconnection traffic volumes, thus making direct interconnection less economically attractive.

“URCA, however, is now of the view that the increase in interconnection traffic likely to arise from mobile competition means that it is now likely to be economically feasible for BTC to offer direct connectivity to its mobile switches, and appropriate for URCA to require BTC to do so.

“URCA also recognises that BTC has direct interconnection links between its fixed and cellular mobile networks, and so to ensure a level playing field, other fixed and/or cellular mobile licensees should have the same opportunity.”

Interconnection between rival operators is vital, because it allows the customers of one carrier to make calls to those of another, and be seamlessly switched between systems.

But in a Bahamian mobile market that is liberalising, and ending BTC’s monopoly, the incumbent carrier has an incentive to either not enter into interconnection agreements, or do so on terms that are disadvantageous to rivals, in a bid to retain customers.

URCA also wants BTC to amend its RAIO so that it charges “cost-based termination rates” for calls originating on other fixed-line and mobile operators’ networks, and which end on its network.

It is proposing that BTC provide at least two interconnection points on its network for Internet Protocol (IP) technology, and termination and cost-based termination rates for domestic and international text and data messages.

“In its preparation for the introduction of competition in the cellular mobile services markets, URCA has engaged with both BTC and Cable Bahamas to assist URCA in determining the key regulatory issues pertaining to the introduction of mobile competition that URCA would need to address,”the regulator said.

“ Among other issues, Cable Bahamas (in its capacity as the winner of the auction) has informed URCA that it was evaluating the merits of instituting a retail tariff regime that differs from the Receiving Party Pays/Mobile Party Pays (RPP/MPP) regime followed by BTC.”

BTC currently requires its mobile customers to pay when receiving a call from a fixed-line customer in the Bahamas.

Cable Bahamas appears to be looking at a ‘calling party pays’ regime, but URCA said: “BTC commented that URCA has not presented any evidence that a Calling Party Pays (CPP) regime would be appropriate for the Bahamas, and recommended that URCA should be guided by the experience of Barbados in this regard.

“BTC added that symmetrical termination rates across cellular mobile networks should be implemented and referenced URCA’s previous determination in support of its proposal.”

URCA, though, said that it needed to ensure mobile termination services needed to allow for different pricing strategies.

“That is, URCA considers it has a responsibility to ensure that BTC has cost-based mobile termination rates in place in the event that it chooses to no longer charge its own retail customers to receive fixed-to-mobile calls and/or mobile-to-mobile (off-net) calls,” the regulator added.