JAMAICAN FAIR TRADING COMMISSION FINDS DIGICEL’S CONDUCT HARMFUL TO COMPETITION AND CONSUMERS

LIME Scores Another Victory for the Jamaican Consumer

Kingston, Jamaica – June 25, 2010: In what is without question a landmark victory for Jamaican consumers, the Fair Trading Commission (FTC) in that country has issued a report which supports LIME’s claim that Digicel has been abusing its dominance by using unfair pricing practices to reduce competition.

Last February, LIME complained to the FTC that Digicel was acting anticompetitively by charging LIME a wholesale rate for calls from LIME landlines to Digicel mobiles which was as much as 62% higher than the retail rate Digicel charges its own landline customers to call the same phones.  This price squeezing by Digicel makes it impossible for LIME to lower its landline to mobile retail rates to compete fairly against Digicel. 

After almost one and a half years of investigation and analysis including information obtained from LIME, Digicel and Jamaica’s Office of Utilities Regulation (OUR), the FTC yesterday issued a report which supports LIME’s allegations and makes recommendations for corrective action to be taken by Digicel and telecoms policy makers.

The FTC found that Digicel’s conduct “is likely to substantially lessen competition in the market for (fixed and mobile voice services)” and that “the most effective means to restore competition would be to alter the regulatory environment to remove Digicel’s undue influence over the price of its rival’s voice services.”

The FTC also recommends that since regulatory change might take some time, Digicel should change its pricing.

LIME considers the FTC Report another vindication of its allegations that Digicel has long left behind its pro-competition stance, and has been abusing its dominance to the detriment of the Jamaican consumer.

Geoff Houston, LIME’s Managing Director for Jamaica and Cayman said, “LIME is extremely pleased that having waited so long for a ruling, the FTC has found in our favour, and in the interests of Jamaican consumers.   We will immediately be seeking the assistance of the Court in implementing these recommendations in the short term, and will also approach the OUR and the Office of the Prime Minister in respect of the medium term recommendations.”

“It is absolutely important that Jamaican consumers and policymakers  recognize that Digicel’s pricing in several cases is preventing LIME, and possibly other providers,  from providing lower rates to customers in these harsh economic times and the situation needs to be resolved in a timely manner,” he added.

The FTC has advised LIME that the recommendations have been sent to Digicel, the OUR and the relevant Jamaican government ministries.