Flow takes regulator to court over termination rate cuts

Telecom operator Cable & Wireless, which operates under the Flow brand, filed an application before Jamaica's supreme court seeking to bar the Office of Utilities Regulation (OUR) from implementing cuts to termination rates for fixed line calls.

OUR had developed a plan to implement the rate cuts over a six-month period, from October 1 to April of next year. However, leading fixed telecoms operator Flow had been demanding a longer glide path extending over two years or more.

The office agreed to refrain from implementing the first rate cut before Flow's hearing for an interim injunction, reported the Jamaica Gleaner.

However, OUR informed in a telecom industry notification that Flow wants a judicial review of its rate decision and sought the interim injunction to restrain implementation of the decision pending the outcome of its application to the court for the review.

Earlier this year, Flow argued that the regulator did not appear to have given consideration to the magnitude of the cuts on its immediate cash flow and the immediate and direct impact these would have on working capital and investment incentives.

OUR had initially determined that termination charges for calls that connect to fixed-line phones were to be reduced by 70-90%, which would lead to cheaper phone calls for subscribers.

Competitors Digicel and Verge Communications favor a swift implementation of the reduction in termination rates, saying it would unduly benefit Flow financially if done over an extended period.