New telephone rates may come into effect September

NEW TELEPHONE rates are likely to come into effect by September this year, once approved by the Minister of Industry, Commerce and Technology, Philip Paulwell.

The Office of Utilities Regulation (OUR) has 30 days in which to review the application which Cable & Wireless Jamaica (C&WJ) has submitted and decide on an increase, which must then meet the Minister's approval. But under the existing regulations, new rates cannot come into effect until 90 days after the application has been made.

C&WJ executives are still declining to comment on the level of increase being sought, but stressed yesterday that the important factor in their negotiations was the Federal Communications Commission's (FCC) benchmark ruling which will slash the company's revenues from incoming overseas calls.

According to C&WJ senior vice-president for finance, James Cheesewright, in the next nine months the telecommunications company would lose about two-thirds of its revenue based on the FCC ruling that as of January 1, U.S. carriers must pay out US19 cents per minute (down from US57 cents) for calls coming into Jamaica.

The company was therefore pursuing the option of rebalancing its revenue by seeking an increase in the price of domestic calls while reducing that of overseas calls. Asked whether C&WJ intended to challenge the FCC ruling, Mr. Cheesewright explained that the FCC was on strong ground in its ruling, which had been implemented in other countries. Therefore, challenging it in a U.S. court was not feasible when the matter could be addressed locally, he said.

Mr. Cheesewright, speaking in a meeting with senior journalists yesterday, said loss of revenue from bypass of C&WJ's international telephone facilities was of consequence, but the move by the FCC would have greater negative impact on the company's financial position. C&WJ is said to have lost about $150 million from May 1999 to May 2000 from bypass of the company's international facilities by unauthorised operators.

Mr. Cheesewright, who will be leaving Jamaica at the end of June to take up his new position as chief operating officer of Cable & Wireless Regional Businesses, based in London, is being replaced by Mr. Chris Sadler.

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