TECHNOLOGY-JAMAICA: Brakes Put on Telecommunications Giant

By IPS Correspondents Reprint | | Print |

IPS Correspondents

KINGSTON, Jan 15 1998 (IPS) - For years it has reigned as king of the telecommunications industry here, but now the local giant could begin to see cracks in its monopolistic control.

A recent ruling by the Office of Utilities Regulation (OUR), the government body set up a year ago to deal mainly with water, light and telephone systems, that Telecommunications of Jamaica (TOJ) has no exclusive right to sell international telephone calling cards in the island, means that TOJ may be forced to open its doors to other competitors.

“The OUR has carefully considered the various factors affecting this issue and has determined that there is no basis in any of TOJ’s licences on which it can assert the sole right to the sale of pre-paid calling cards in Jamaica, or by which the purchasers of such cards sold legally by other business enterprises should be prevented from using them to access the TOJ network,” the OUR’s statement said.

Officials at the TOJ say they are studying the statement and its implications for the company. Observers say they are not likely to give in without a fight.

The OUR’s ruling was made following a complaint by MCI through its local representative the Canadian Caribbean Investment Enterprises (CCIE) that TOJ was blocking the use of its cards. Investigations were made and the statement issued.

CCIE officials say MCI and another US firm, Sprint, were not allowed to distribute or offer service in Jamaica because of threats by TOJ to disconnect the toll-free access lines provided if they did so. Now the OUR statement could open the once closed doors.

Others are also hoping that in time the monopoly arrangements handed the TOJ by the government under the 1988 licence, will change to allow other providers to enter the market. This they feel will mean an improvement in an inefficient service.

“I will wager money that if the government removes the monopoly status that TOJ enjoys and allows competition, there will be a dramatic change in the way TOJ conducts its business,” says one observer.

Meanwhile, local representatives for Sprint, InterCom, say the company’s pre-paid card called “Spree” are sold in Jamaica but they can only be used from overseas to call Jamaica as TOJ has made it clear that the card could not be used to make calls from Jamaica as they had the monopoly on that service. Now that should change.

And MCI has already signalled its intention to come a-calling. It says come next month it will begin to sell in Jamaica, pre-paid cards to be used to make international calls.

“We are presently distributing cards in Guyana and Trinidad because we were never allowed to market our cards to Jamaica…” says Paul Hay, President of the CCIE. Now the company will. The card is to be called “the Caribbean Caller.” TOJ’s international card is called “World Talk.”

This is not the first time that TOJ, a subsidiary of the British Cable and Wireless firm, has come in for criticism for its monopolistic control of telecommunication service in the island.

Despite TOJ’s extensive expansion plans over the last five years and its projection of expenditure of some 1.3 billion dollars over the next 10 years, demand for telephone services is still outstripping supply.

Then too small Internet providers have complained that TOJ’s monopoly gives the telephone company an unfair advantage over them.

For instance, they say, the company installs the telephone lines required by the Internet user. When a customer goes in to discuss the installation of telephone service it provides immediate opportunity for TOJ to offer Internet service at the same time, the private providers contend.

There are about 12 small Internet providers in the island.

The small providers also say TOJ is able to provide Internet service at a cheaper rate than they. For most of the small companies the usage fee is two dollars per hour. TOJ on the other hand has a charge of 2.20 dollars for the first 10 hours of usage, thereafter, users attract a fee of 1.70 dollars per hour.

Now at least some people are hailing what is being referred to as a welcome crack in this monopolistic control.

Some say the OUR ruling which allows other companies to enter the pre-paid calling cards market means consumers will no longer be at the mercy of TOJ, but will instead have a choice. For some, this should have been the case years ago.

“With the rapid advance of cellular chip technology, Internet communication and satellite-aided communication, monopolies will soon become untenable.

“These technologies now allow worldwide communication at a fraction of traditional telephone rates. Most of the world has already liberalised their telecommunications systems, allow fee and fair competition, hence choice,” ran a recent Editorial in the Daily Gleaner.