With
MNP (Mobile Number Portability) and LNP (Landline Number Portability) looming
on the horizon, has the Jamaican consumer benefitted much from the MTR (Mobile
Termination Rate) adjustment of JA$5.00 per minute or Cross-Network Calling
introduced by the OUR (Office of Utilities Regulation) on Sunday July 15th
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
did those benefits increase when the OUR again applied another MTR and dropped
the Cross-Network Calling Rate to JA$1.10 per minute on Monday July 1st
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”?
It
appears to be a mixed bag of benefits despite the statistics put forward by the
FTC (Fair Trading Commission) whose study implies that since MTR, Jamaicans are
talking more as stated in the article “Mobile
termination rates versus value products”, published Friday November 28,
2014 by McPherse Thompson, Assistant Editor, The Jamaica Gleaner.
So
what do the stats actually say? They’re quite straightforward really. But the
Telecom Providers disagree on their source as well as what cause the apparent
increase in talk time!
FTC implies MTR has
increase Talk time – 13% increase or 1.281 billion minutes is significant
According
to the FTC figures, from the July 2012 up until March 2014, Subscribers talk
time has increased as follows:
1.
10.02 billion minutes if the MTR was not reduced
2.
11.3 billion minutes since the
MTR was reduced
3.
1.281 billion minutes differences
between the figures
This
translates to savings that vary based on the adjusted Calling Rates being used
by either JA$1.77 per minute for Telecom Provider LIME
at the low end or JA$15.75 per minute for Telecom Provider Digicel on the high end. Based on my
calculations these savings on International Calls work out as follows:
1.
US$22.7 million at JA$1.77 per
minute for Telecom Provider LIME customers
2.
US$201.7 million JA$15.75 per
minute for Telecom Provider Digicel
customers
So
basically from these figures, it can be seen clearly that since the two MTR ,
the first introduced on Sunday July 15th 2012 and second introduced
on Monday July 1st 2013 that the amount of minutes of calling on
Mobile Telecom Networks in Jamaica has increased by some 12.78%, rounded off to
13% as the FTC has done. However the Telecom Providers are disputing these
figures, both in terms of source as well as in terms of the real reason for the
apparent increase.
FTC claims 13% increase
in Calling post-MTR - Digicel and LIME claim Marketing not MTR
That
right statistics fans!
Telecom
Provider Digicel claims its more
marketing and not MTR even as they dispute the source of their stats to quote
their response to the Jamaica Gleaner: “If there has been an increase in talk
minutes, quite likely it is as a result of, in the case of Digicel, the injection of more offers
into the market such as our Gimme Five and BFFF (Best Friends For Free) offers.
This would not translate into increased revenue for Digicel. The MTR reduction has taken
value out of the market as it has reduced revenues for operators and therefore
taxable income for the Government, traditionally obtained from the Jamaican
telecommunications sector”.
Good
to note at this point: Digicel and
the FTC were involved in a legal case with the FTC since May 2012 with regards
to the legality of Digicel Group
swapping Digicel Honduras and Digicel El Salvador in exchange for
America Movil’s CLARO Jamaica Telecom operations as argued in my blog
article entitled “FTC
wins right to pursue legal action against the Digicel-America Movil swap - Game
of Thrones as Mobile Data Candyshop beckons”.
Telecom
Provider Digicel has since then
won the case as stated in the article “FTC
Has No Jurisdiction Over Digicel, Claro Merger - Appeal Court,” Published
Wednesday December 31, 2014 by Barbara Gayle, Justice Coordinator, The Jamaica Gleaner and “Court
of Appeal to rule on Digicel/FTC case in October” published Wednesday, May
22, 2013 by Paul Henry, The Jamaica
Observer with FTC possibly considering to file an appeal relating to the
decision.
Telecom
Provider Digicel is claiming that
it the increase in minutes is due to their Gimme 5 Promotions as stated in my blog
article entitled “Digicel's
Sweetest Deal and Digicel Mobile 4G Launched - Challenge to LIME Talk EZ
heralds Postpaid, MRSI via MNP and Cashless Society Renaissance”.
They
claim it represents a loss of revenue in order to hold on to customer in face
of competition from Telecom Provider LIME as
described in my Geezam blog
article entitled “Digicel launches 4G Mobile and
JA$2.89 Sweeter in a bid - Jamaican Voice + Data Summer Wars”.
LIME’s Talk EZ Explanation – Mobile Customer increase but Total
Revenue Decline
Telecom
Provider LIME has a similar explanation for
the rate increase, claiming it was due to their Talk EZ Promotions after the
MTR on Sunday July 15th 2012 as stated in my blog
article entitled “LIME's
new TALK EZ Plan drops Cross Network Calling to JA$2.99 - Digicel's Game of
Thrones vs LIME Return of the King”.
The
following MTR that came into effect on Monday July 1st 2013 saw their Talk EZ
Promotions adjusting prices as stated in my blog
article entitled “LIME
drops JA$2.99 Talk EZ to All Networks as Digicel promises something Bigger -
Telecom Providers can bring The Heat via lower Priced Smartphones to spur 3G
Data and Postpaid Plans”.
Hence
Telecom Provider LIME explanation, quote: “The
overwhelmingly positive consumer response to our bestvalue Talk EZ $2.99 rate,
also evidenced by the addition of another 150,000 subscribers in 100 days in
2013, have contributed to steady quarterly gains in mobile services revenue. We
expect this trend to continue with the more recent introduction of even better
mobile voice and Internet value featured in the increasingly popular MVP plan”.
Telecom
Provider LIME also benefitted in other ways
as well, based on their Financial Report for the Year ending Monday March 31st
2014:
1.
JA$5.3 billion for out payments and direct costs
i.e. Cross-Network Tariff charges
2.
JA$7.15 billion for out payments and direct costs
i.e. Cross-Network Tariff charges for the same period in 2013
3.
JA$6.67 billion in
Mobile Revenue
4.
JA$5.2 billion in
Mobile Revenue for the same period in 2013
This
based on their Financial Report for the Year ending Monday March 31st
2014 back in June 2014 as chronicled in my blog article
entitled “CWC
Report ending March 2014 indicates LIME Jamaica's improving Bottom Line -
Project Marlin heralds Solar Powered Telecom Provider to Reduce Operating Costs”.
If
anything, Telecom Provider LIME seems to
have benefitted overall. They experienced a 31% growth in Mobile Subscriber
Base to 705,000, representing an increase of 165,000 subscribers but saw their
revenues decline to JA$18.4 billion in total revenue, down from JA$19 billion
in 2013.
Herfindahl
Hirschman Index – Closer to 10,000 after CWC Acquisitions. MTR or no MTR
What
now remains to be seen is how competitive the MTR has made the Jamaican
Telecoms Industry. The standard measure thus is the Herfindahl
Hirschman Index, which according to the OUR back in July 2012 had
increased after Digicel acquired
CLARO Jamaica follows:
1.
7,223 points after Digicel had acquired CLARO Jamaica
2.
5,104 points before Digicel had acquired CLARO Jamaica
10,000
is the upper bound of the Herfindahl Hirschman Index, indicating a market
that's least competitive.
Clearly,
since CWC (Cable and Wireless Communications) has acquired FLOW for some US$3
billion dollars on Friday November 7th 2014, basically killing the
only remaining competition in Jamaica as stated in the article “Cable
& Wireless to acquire Flow parent for US$3b. Digicel knocks deal as bad for
competition”, published Friday November 7, 2014, The Jamaica Gleaner and “Cable
& Wireless buys Columbus Intl”, published
Thursday, November 06, 2014 6:29 AM, the Jamaica Observer.
Now
that CWC has also acquired Dekal Wireless Jamaica as announced Tuesday,
December 9th, 2014 as reported in “LIME
to take over operations of DEKAL Wireless”, published Tuesday, December 09,
2014, the Jamaica Observer and “CWC
company acquires small wifi rival DEKAL”, Published Wednesday December 10,
2014, The Jamaica Gleaner, that index
is a lot close to 10,000, MTR or no MTR.
This
spells doom for the customer as their choices are basically limited by a
duopoly set of players who can control the market any way they wish in the Year
of the Sheep!
No comments:
Post a Comment