ICCC sets rates

NEW mobile phone call rates announced by the Independent Consumer and Competition Commission (ICCC) are set to trigger a phone war between Telikom, bemobile and Digicel.
The ICCC this week released to the companies new rates it approved, which would be effective until the end of the year.
The new mobile termination rates, delayed from June, were not made public, but they are understood to be 15% lower than the previous rate.
The old mobile termination rates were 46 toea per minute for peak, and 42t per minute for off peak period. The new rates are 42t (peak) and 36t (off peak).
These rates apply to the phone companies, and are not what a mobile phone user is charged for a call.
It is understood that both Telikom and bemobile had applied to ICCC in their submissions for termination rates to come down to 5t per minute or even zero.
“If rates (mobile termination rates) were to come down to as low as 5t per minute, the market would explode and the cost of a call would come down from the current high of 90t per minute to around 35t or 30t for off net calls,” an industry source said.
Off net calls are calls a mobile phone user makes from one network to another.
Off net call charges for Digicel, which controls about 80% of the mobile phone market, were higher, the source said. “This keeps their users on the network, at cost, and Telikom and bemobile consider this to be abuse of (Digicel’s) market dominance. They see the retail pricing as anti-competitive,” the source said.
It is understood that the board and management of bemobile would meet next week to determine their next course of action.“This ICCC announcement favours Digicel. Therefore, bemobile and Telikom will flex their muscles. They will pour in millions of kina to fight this mobile war,” an official familiar with the pricing issue said.
Telikom and Digicel have been at loggerheads over pricing since interconnection was approved in June last year.
ICCC decided to arbitrate the dispute, and submissions were made by the three companies to the regulator.
Last December, the then BMobile announced its separation from Telikom, and invited two foreign partners and local super funds to be equity partners in what is now bemobile.
Telikom retained 50% in bemobile. Under a new telecommunications policy to be formalised by the Government in November when Parliament meets, ICCC will no longer be the regulator of the industry.
With the new rates announced this week being interim until year’s end, this could change with a new regulator.