Digicel sued by competitor in Caribbean over price charged for fixed-to-mobile calls

LIME/CABLE Wireless, a competitor of Denis O’Brien’s Digicel in the Caribbean, has filed a $43.77 million (€30.61 million) suit in the Jamaican Supreme Court alleging overcharging.

The move is “a hardening of the company’s attitude in its ongoing battle with Digicel”, according to a source close to Lime.

Digicel was launched by Mr O’Brien in Jamaica in April 2001 and quickly knocked Cable Wireless, as it then was, from its dominant position in Jamaica and the Caribbean generally.

The competition between the two has continued as Digicel has spread throughout the Caribbean. The court claim involves alleged overcharging by Digicel of Lime since 2003 in regard to fixed to mobile rates.

Lime’s claim is based on the fact that in August 2003, Digicel informed Lime that retail fixed-to-mobile (FTM) calls were to be charged to customers on a per minute rather than per second basis.

Prior to that, the parties had been paying FTM termination rates on a per second basis.

From November 2003 Lime started paying for interconnection on a per minute basis instead of the pre-existing per second regime.

This resulted in significantly higher payments out from Lime due to the fact that part-minute calls are rounded up to the nearest minute, according to Lime.

On June 4th this year, the Jamaican office of utilities regulation issued a clarification notice regarding FTM charges in which it stated that Lime was only required to pay to other mobile carriers the contractually agreed termination rate for calls.

Subsequent to the clarification being issued, Lime wrote to Digicel indicating that the contracted rates for interconnection as contained in the interconnection agreement between the parties were on a per second basis and all payments made by Digicel were also on a per second basis.

But Digicel has appealed the clarification finding to the Jamaican Appeals Tribunal, seeking a stay.

Commenting on the claim, Geoff Houston, country manager for Lime Jamaica said: “We are happy that the regulator has ruled in the manner they did, as much of the benefits going forward will rebound to our customers. We believe this is a fair position and seeks to level the playing field in this regard.”

However, Richard Fraser, legal and regulatory manager for Digicel Jamaica, said it “does not see any merit whatsoever in the recent claim filed by Lime” and will be vigorously defending itself in the action.

Lime “is clearly seeking to rewrite history based on a dubious reinterpretation of a well-established and understood regime which it happily subscribed to for many years,” according to Mr Fraser.