OUR to hire Consultant for LRIC Study on Landline - JA$1.49 per minute for Fixed Line and Landline Flat Rate as MNP, LNP Approaches

“A decision can be expected within 20 months of the commencement of the project. This should be by April 2016. The OUR expects that a Consultant will be chosen by June 26, 2014”

OUR (Office of Utilities Regulation) Public Education Specialist Elizabeth Bennett Marsh in emailed response to the Jamaica Observer Queries related to LRIC for Landline

Jamaica is yet to know the name of the Telecoms Consultant to the Ministry of Science, Technology, Energy and Mining who was hired on February 2014 to set up a Telecoms Regulator in Jamaica as I’d reported in my blog article entitled “New Telecom Regulator finally coming by July 2014 - New Telecom Provider looking for stability in the Jamaican Telecoms Market post-LNP and MNP by May 2014”.

Now there is to yet another post to be filled for a Consultant to the OUR (Office of Utilities Regulation) by Thursday June 26^th, 2014! This time chosen from a field of 10 applicants to give the Ministry of Science, Technology, Energy and Mining advice on Landline Rate adjustments based on a LRIC (Long Run Incremental Cost) Study as reported in “Telecom Regulator going after fixed line rates”, published Friday, May 30, 2014, The Jamaica Observer.  

The Telecoms Consultant for the setting up of the Telecom Regulator was chosen from a batch of 18 persons. That lucky individual, most likely a foreigner, is to be paid a hefty salary plus emoluments via a loan from the IDB (Inter-American Development Bank), he’s yet to be publicly named, at least to my knowledge. We’re also fast approaching July 2014 when the New Telecom Regulator is to come on Stream and still no news on that either!

So it seems that despite the price reduction in the Mobile Market with the MTR (Mobile Termination Rate) adjustment by the OUR (Office of Utilities Regulation) on Monday July 1^st 2013 as stated in my blog article entitled “OUR sets Cross-Network Rates at JA$1.10 as of Monday July 1 2013 - Everything is Possible  as we’re Zombies for Data World War Z” to JA$1.10 per minute, Landline is still of significance enough to justify a LTR (Landline Termination Rate).

The previous MTR adjustment, also based on a LRIC, was done by the OUR on Sunday July 15^th 2012 as stated in my blog article entitled “OUR's JA$5.00 Cross Network Flat Rate ratified by Judge Ingrid Mangatal - GOJ's Telecoms Tax applied and Digicel's victory in FTC Case assured” and had move the rates from JA$9.00 to JA$5.00 per minute.

OUR hiring Landline Consultant – FLOW’s complaints being addressed finally

I say this as the Rates for Landline were already significantly lower than Mobile before the MTR and since Monday July 1^st 2013 they are basically on par. To wit, take at gander at the Landline Termination Rates for LIME prepaid and postpaid Landline/Fixed Line listed below:

1.      LIME Landline/Fixed Line to other Landline/Fixed Line providers - JA$2.40 per minute

2.      LIME Landline/Fixed Line to Local Mobile Providers - JA$2.85 per minute

3.      LIME Landline/Fixed Line to LIME Mobile - JA$2.85 per minute

4.      LIME Landline/Fixed Line to Landline/Fixed Line - JA$0.99 per minute

Good to note here that LIME is the main Fixed Line or Landline Provider in Jamaica but other companies such as FLOW and Telecom Provider Digicel also have Fixed Line Services that essentially act as Landline as noted in my blog article entitled “Digicel rolls out DigiHome, their first Residential Postpaid Fixed Line Service - Ramp up for Landline Number Portability and LIME’s Homefone XPress”.

So with such low prices already for MTR why the sudden need to lower them?

Possibly it may be to address Triple Play Provider FLOW’s complaints since 2012 of pricing anomalies for terminating Telecom Provider LIME Fixed Line and Landline Calls which are making their Fixed Line Service unprofitable as noted in my blog article entitled “Flow at odds with over Cross-Network rates for Fixed Line - Total Recall of the coming Importance of Triple Play Services”.

Despite Telecom Provider LIME’s comments to the contrary, then President and CEO of FLOW Michelle English had commented that the Telecom Tax that was implemented in 2012 would see them losing revenue as noted in my blog article entitled “FLOW rants of Voice Decline as LIME Provides the Evidence of coming Profitability - The Hobbit An Unexpected Journey Adventure begins for Data Networks”.

OUR’s obligation under the Telecommunications Act – New Regulator should be working already

This explanation, however, will not suffice. The whole Telecoms Industry isn’t bending over for just one Telecom Provider, no matter how much money they may be throwing around.

The Jamaica Observer got a little curious about the fact that there was to be an LRIC and even the fact that a Consultant was required from a field of ten (10) persons, in light of the absence of a Contractor for the setting up of a Regulator.

After all, The Jamaica Observer probably reasoned, if a Consultant had already been chosen from the eighteen (18) to set up the New Regulator, there would by logic be no need for the OUR to be seeking consultative services again, as that function would be taken up by this new Telecom Regulatory body that should be in the process of coming on stream.

So The Jamaica Observer emailed the OUR and got this response, quote: “Under the Telecommunication Act, the OUR has a responsibility to ensure that the price levied for interconnection by dominant carriers, with the exception of interconnection charges for wholesale termination services, is cost reflective and between the total long run incremental cost (LRIC) of providing the service and the stand alone cost of providing the service”.

If this is true, then despite the lack of a New Regulator, which is slated to come on Stream by the July 2014, the OUR is still mandated to act, to further quote their emailed response to The Jamaica Observer: “Interconnection charges for wholesale termination services charges should be calculated on the basis of a forward looking long run incremental cost, whereby the relevant increment is the wholesale termination service and which includes only avoidable costs. In essence, the OUR has to ensure that prices are cost-oriented and not over-inflated by greedy Telecom Providers! Having cost-oriented interconnection rates facilitates a level playing field thus aiding the development of a competitive environment.”

Postpaid Renaissance due to MTR – LTR Flat Rate will hopefully hasten MNP, LNP

So we may be on the cusp of a Landline/Mobile Flat Rate Calling Regime with a Flat Rate of JA$1.10 across all services. To wit, the price table would look as thus:

1.      LIME Landline/Fixed Line to other Landline/Fixed Line providers - JA$1.10 per minute

2.      LIME Landline/Fixed Line to Local Mobile Providers - JA$1.49 per minute

3.      LIME Landline/Fixed Line to LIME Mobile - JA$1.49 per minute

4.      LIME Landline/Fixed Line to Landline/Fixed Line - JA$1.49 per minute

When the MTR had originally dropped in 2013, I’d gone out on a limb to predict that this would result in a Postpaid Renaissance in Mobile, being as the rates are as low as Landline, which is mostly Postpaid as stated in my blog article entitled “JA$2.00 Cross-Network Rates expected from OUR in May 2013 - Postpaid Renaissance, Pain and Gain for Digicel Prepaid in LIME's Ender's Game”.

There is evidence that this is starting, despite the stiff Jamaican Economy.

Postpaid services such as Digicel DigiHome as described in my blog article entitled “Digicel rolls out DigiHome, their first Residential Postpaid Fixed Line Service - Ramp up for Landline Number Portability and LIME’s Homefone XPress” have rolled out to compete against Landline, boosting Postpaid Fixed Line’s profile.

The MTR had apparently benefitted Telecom Provider LIME, who saw a 25% increase in their customer base as reported in February 2014 and chronicled in my blog article entitled “LIME experiences 25% increase in Profits due to MTR - 4G LTE and FTTH like Bahamas with IPTV Streaming LIME TV will give LIME 3 Days to Kill”.

Oddly, the State Minister Julian Robinson in the Ministry of Science, Technology, Energy and Mining has declared MNP (Mobile Number Portability) and LNP (Landline Number Portability) won’t be implemented until December 2014 as reported in my blog article entitled “State Minister Julian Robinson has announced that MNP is delayed until December 2014 - ICT Roadmap in shambles as Fourth Delay Suggest Telecom Provider's Stalling the Process”.

Telecoms Regulatory Body – Consultants may be Local and may end up as President and Vice President

So it’s coming a little clearer now.

With MNP coming in December 2014, we should have a Telecoms Regular long before then. The Telecom Regulatory body is to replace the following trio of Regulators that oversee Spectrum issues in Jamaica:

1.      SMA (Spectrum Management Authority)

2.      BCJ (Broadcasting Commission of Jamaica)

3.      OUR (Office of Utilities Regulation)

The 700MHZ and the AWS (Advanced Wireless Service) Spectrum already auctioned to Telecom Provider LIME and Telecom Provider Digicel respectively as reported in my blog article entitled “LIME chooses AWS for 4G LTE – AWS  Link Budget difference reduces Shadowing as It’s all about Optimization and Human Nature” and “Digicel to invest US$85 million in 4G LTE Network - 25% of Total revenue from ICT as 4G LTE Investments designed to weather the coming Summer WhatsApp Storm”.

Thus it may be a case that the Ministry of Science, Technology, Energy and Mining has plans to resolve the Area Code requirement from the NANP (North American Numbering Plan) before December 2014 as stated in my blog article entitled “OUR applies for new Area Code for Jamaica - Competition in Telecoms in the coming Hunger Game Catching Fire of Mobile Computing”. A more efficient reuse of Phone numbers, however, means that this may occur after MNP and LNP and NOT before!

Hopefully MNP and LNP will be implemented by December 2014.

By then new Telecom Regulator would have been set up by the Consultant that was supposed to have been hired from February 2014. By then this New Consultant would be hired by Thursday June 26^th, 2014 and would have handed down his pricing based on OUR Stats.

Throw in the stats provided by all the Telecom Providers in Jamaica and run it through the LRIC for Fixed Line/ Landline and it’s hoped that it will usher in a Landline/Mobile Flat Rate Calling Regime set at JA$1.49 per minute

Triple Play Provider FLOW and Telecom Provider Digicel may or may not be thrilled by this news. But Triple Play Provider FLOW complaints about Telecom Taxes and unfair Telecom Provider LIME’s Fixed Line/Landline Rates would be addressed in one fell swoop.

By then, to retain their services, they may both end up heading the new Telecom Regulatory Entity as President and Vice President, as with that level of knowledge, they’d have to be kept on the head the organization.

This suggests that they may be local! Stay tuned as this story develops!