C&W Stands Firm

Thursday, March 11, 2004

Cable & Wireless (C&W) has pledged to press on with its cell phone price cuts despite being advised not to by the Information and Communications Technology Authority (ICTA).

"We have made a promise to our customers, and that promise we are determined to keep," said C&W's acting chief executive Alee Fa'amoe.

"Despite blocking efforts and intense lobbying pressure by our competitors, we have launched the rate reductions as proposed, as we are fully entitled to do under the terms of our license issued by the ICTA," he added. 

The defiant stance came when the ICTA issued a stern press release on Tuesday after C&W snubbed its initial recommendations to defer the price reduction that went into effect on Tuesday.

Among the points made in the release, the ICTA advised current and potential C&W customers that the new rates were subject to regulatory review and that there was a possibility they would be revised. 

"Customers may wish to take this into account when making their purchasing decisions," the release warned.

On Monday, the ICTA's Managing Director, Dave Archbold, wrote a letter to C&W's Vice President, Regulatory and Carrier Relations, Rudy Ebanks, informing the company that the Authority was investigating whether the newly announced price reductions were anti-competitive.

"Based on its understanding of the information currently available, the Authority believes that certain aspects of the new rates, if introduced, may place C&W in breach of (the) licensing conditions," the letter stated.
The ICTA said it welcomed progressive price reductions in telecom costs, but that one of its principal functions was to promote sustain-able competition.

"Accordingly, the Authority has required Cable & Wireless to demonstrate that its new mobile prices are not below cost, and are not being unfairly cross-subsidised by revenue from services where it still enjoys a monopoly."

Although the ICTA had asked Cable & Wireless to defer its announced price reduction until after the regulatory review, the telecom company moved forward with the rate cuts as planned. 

C&W said it was confident that the price reduction would stay as announced. "The rates we have launched will pass any reasonable regulatory scrutiny, under an imputation test. Cable & Wireless will present ample evidence of this to the ICTA on Wednesday 10th March," said Mr Fa'amoe.

"We trust the ICTA will be quick to publicly confirm this test has been passed so as to avoid any further uncertainty in the minds of consumers."

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