CICRA concludes business connectivity review

Thursday 21 May 2015

The Channel Islands Competition and Regulatory Authorities is set to implement retail-minus price controls on wholesale leased lines provided by JT in Jersey and Sure in Guernsey following its business connectivity consultation.

Leased lines, also known as private circuits, are commonly used by businesses to provide secure, dedicated, high capacity data and voice connections between offices and third parties.

CICRA undertook a review of the sector during 2014 engaging with telecoms operators, businesses and policymakers, to discover if the market was working in the best interests of business consumers in terms of choice, quality and value for money.

CICRA has concluded that, while there was no evidence of excessive pricing, Sure in Guernsey and JT in Jersey continue to have significant market power in the provision of leased lines to other telecoms operators and that it would be appropriate to put a retail minus price control of minus 20 per cent.

A retail-minus price control sets the wholesale prices of products within a market with reference to the associated retail price and with a minus margin that is considered sufficient for an efficient operator to compete profitably in that market.

CICRA chief executive, Michael Byrne, said: “This is the final part in a formal process which sets out a strong, sustainable framework for regulation in the future.
“A retail-minus price control in the wholesale market will strengthen the competitive environment that encourages and protects efficient market entry for competitors and promote investment that will ultimately benefit the end user.

“CICRA has also undertaken to ensure JT and Sure publish the profits earned by providing these services in the interests of transparency around how the operators are performing in these markets. JT and Sure will also be required to submit regular statements formally confirming compliance with the wholesale price control.”