New clash between JT and watchdog

Monday 23 December 2019

A fresh battle has broken out between JT and the competition watchdog after the telecoms provider was forced to change its broadband prices amid claims of ‘squeezing’ competitors.

The Channel Islands Competition and Regulatory Authority (CICRA) said that the company, which has 60% of the retail broadband market, had been acting against its telecoms licence by charging too much for wholesale broadband services since January 2019.

CICRA claimed that this left its competitors with no choice but to set their retail prices higher than those of JT, minimising competition in the broadband market and choice for consumers  - a practice known as ‘margin squeeze’. 

This, the authority alleged, was a contravention of Condition 34 of JT’s telecoms licence: “...not to abuse its dominant position or act in a way that would prevent, restrict or distort competition in the telecoms market, for example by causing a margin squeeze.”

Pictured: JT CEO Graeme Millar.

Having concluded its investigation, the authority ordered JT to amend its pricing structures – either by tweaking the wholesale price, or upping its own retail prices – in a judgment handed down on Friday. 

But JT’s CEO Graeme Millar hit back at the claims as “unfounded”, stating that the company noted them “with real disappointment”. 

However, he said that, while JT disagreed with the finding, “we also need to minimise any potential customer confusion or uncertainty”.

He therefore said that the company would abide by the ruling, explaining: “We have already taken action on 3 of the 6 products mentioned by CICRA, and will be contacting the very small number of customers using the other 3 in the New Year, to discuss any changes required with the minimum possible negative impact for them.”

Pictured: JT has previously successfully appealed CICRA judgments in the Royal Court.

It’s the latest in a set of clashes between JT and the competition watchdog over the years. 

CICRA has twice been challenged by JT in the Royal Court, losing in 2013 and 2017, leading to questions over the body’s efficacy.

Commenting after the latest ruling, Graham Hughes, Chief Executive of competitor telecoms company Sure, said JT's pricing structure "made it impossible for us to compete fairly for broadband customers".

He added that Sure believed CICRA's judgment actually should have gone further, adding: "...We believe that the decision falls short of correcting the full extent of JT's anti-competitive behaviour and have urged them to take further action on this."