State to regulate wholesale telecom prices

November 21, 2009 02:22:58 PM

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After months of delay, government has finally announced that it will intervene in the wholesale prices of voice-based telecommunication services in Fiji, as a comprehensive study it commissioned has found that substantial market powers do exist in Fiji’s telecommunications market. 

At a press conference yesterday, Attorney General and Minister for Justice, Anti-Corruption, Public Enterprises, Industry, Tourism, Trade and Communications, Aiyaz Sayed-Khaiyum, said he signed a new price control order, which will allow the Commerce Commission to set and regulate prices of all wholesale services, including interconnection services. 

“This price control order is different from the previous one which was revoked as it regulated both the wholesale and retail sector.  Furthermore, there was no detailed substantial market power study carried out previously,” Sayed-Khaiyum said. 

“However, in this price control order, we have resolved these anomalies, which means that only the wholesale segment shall be regulated, thereby removing anti-competitive behaviour.”

While this new decision is directly targeted at the major telecommunication companies in Fiji who wholesale voice-based services, it is expected that the move will foster competition. 

“As seen in other jurisdictions, regulated wholesale pricing increases competition in the retail segment, which is beneficial for the consumers and the economy.  And it provides confidence and certainty to the stakeholders in the telecommunications sector,” Sayed-Khaiyum said. 

In late May, the Commerce Commission, Fiji’s monopoly watchdog, undertook an evaluation of the level of existing or likely competition in the relevant markets for the provision of interconnection services in Fiji.

After consultation with industry and regulatory stakeholders, it found that substantial market power exists and that there was a need to regulate the industry at wholesale level. 

Fiji’s telecommunication market was recently subjected to major reforms following the signing in January 2008 of a Deed of Settlement between the Fiji government and incumbent operators, for the premature ending of their exclusive licenses in return for free 14-year open licenses. 

This then set an agenda for a number of major developments including the launch in Fiji last year of Irish-owned Digicel, followed by the opening up of the international telecommunications gateway in July this year.

This year too, the government embarked on rationalising its spectrum resource through a Spectrum Decree.