TRC still investigating pricing tactics of Digicel & LIME
BVI News correspondent - Tuesday, April 5th, 2011 at 9:15 AM
The Telecommunications Regulatory Commission (TRC) is expecting results from its investigations stemming from a complaint from CCT accusing LIME and Digicel of anti-competitive behaviour by May of this year.
This investigation comes following a complaint filed by Caribbean Cellular Telephone Ltd (CCT) in July 2009. Although the complaint primarily named Digicel, it also mentioned of LIME.
The issue being investigated by the TRC revolves around the rates that Digicel charges its own customers for calls and roaming services to destinations in the Caribbean compared to the price Digicel charges CCT for such services in those countries.
Tomas Lamanauskas, Chief Executive Officer of the TRC told BVI news in an exclusive interview this week that the investigations were launched at the end of last year. He announced: “We have launched an official investigation on both the activities of LIME and Digicel related to the claims of CCT; specifically in the pricing practices of the companies relating to calls to other Caribbean destinations where LIME or Digicel has their sister companies and of course CCT doesn’t have affiliated companies.”
In its complaint CCT stated that: “Digicel, with Lime, enjoys a dominant position in the provision of such service, offers its customers rates that are vastly below the price charged by it and its affiliates to CCT. For example: As part of their end user plans, Digicel sells minutes as cheaply as 0.6 cents/min, while the price to CCT for terminating calls on their sister companies’ networks in the Caribbean is 19 cents/min. on average, or 32 times as much.”
CCT had also provided examples of its claims, eg: “Digicel International Long Distance (Caribbean), Price/Minute to Retail Customer $0.006*, Price/Minute to CCT $0.19, Caribbean Weekly Plan, 2,100 minutes for $14 per week (0.6 cent per minute). These prices are only possible if Digicel has entered into agreements with its sister operating companies in the Caribbean to be charged little or nothing for these services, while enabling it to charge high rates to non-affiliated companies like CCT to “make good” on the lost revenue,” CCT argued.
In fact CCT General Manager Jose Luis Fernandez announced: “These practices are clearly illegal under BVI law. But more important, these low prices will not last. They are strictly designed to drive CCT out of business. Once that is accomplished and there is no more native competitor, consumers can be sure that prices will skyrocket and service will diminish.”
CCT in its complaint also requested the TRC to require both LIME and Digicel to charge CCT, as a maximum, rates equivalent to the ones being applied to their end customers.
In the meantime Lamanauskas told BVI News Online that at this stage the TRC is finalizing collection of data. He said that once this data has been collected a conclusion would be made: “At this stage I cannot comment on any possible outcome but it is a matter that we are considering seriously,” he announced.
The Chief Executive Officer stated that the TRC felt that CCT’s concerns are serious and warranted an investigation. He also mentioned that prior to the investigation the TRC tried to get the parties (LIME, DIGICEL and CCT) together and tried for parties to resolve their issues.
“While we felt that concerns were strong enough to start an investigation, at this stage I couldn’t comment whether there is merit in the complaint or not because the TRC’s main role and main responsibility is remaining partial to the investigations; so we will only be able to make those comments once we have had final conclusions,” Lamanauskas said.
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