The Tribune

By NEIL HARTNELL Tribune Business Editor THE BAHAMAS Telecommunications Company's (BTC) proposed 17.65 per cent retail mark-up for directory inquiry calls has been deemed "reasonable" by the sector regulator, although it lacks the information to determine whether the $0.35 per call charge could produce a "margin squeeze". Approving BTC's application to charge consumers $0.35 per call for directory inquiries made on its network, the Utilities Regulation & Competition Authority said it would keep the situation under review, and require the newly-privatised carrier to provide details on its "downstream costs" as part of its annual separated accounts. Analysing whether BTC's $0.35 per call price could have an anti-competitive effect by reducing the ability of rival operators, who would have to use part of the incumbent carrier's network, to profitably match its offer, URCA said it could not "could not reasonably determine whether the price proposed could result in a margin squeeze. "Further, URCA has no information on the cost that would be incurred by an efficient operator wishing to replicate BTC's offer. URCA notes that the proposed mark-up of 17.65 per cent could be in line with common retail margins for other communications services. Thus URCA believes it would be reasonable for URCA to accept BTC's proposed level of retail charging for the service." Among the conditions set for approval, URCA has mandated that the first three calls to directory inquiries each month, from business and residential fixed lines, and cell phones, be free of charge. All inquiries from pay phones are to be free of charge, too. In addition, customers calling directory inquiries can have their calls connected directly to the number they are inquiring about free of charge. BTC, in its benchmarking exercise, showed its $0.35 per call directory inquiry charge was below the sample average of $0.585 per call. URCA added: "URCA is equally mindful of DQ [directory inquiry] charging practices in other markets with similar characteristics to the Bahamas. "In Bermuda, for example, calls to local directory inquiries are assessed at US$1 per call and customers must pay an additional 50 cents to have calls completed to the requested numbers. In the Kingdom of Bahrain, BTC's equivalent (Bahrain Telecommunications Company) charges 40 US cents per call to directory assistance." The regulator added that information provided by BTC showed that every Bahamian household made an average of 1.2 calls to directory inquiries per month, with each fixed-line customer making an average of one call. And one in three cellular subscribers called directory inquiries per month. "Based on the foregoing estimates, URCA is reasonably satisfied that allowing fixed and mobile customers to each make the first three calls per month to directory inquiry free of charge will minimise the financial impact of the price increase on customers," the communications sector regulator added. "Regarding the specific comment on the potential financial impact of the proposed new price on businesses, URCA notes that businesses will also be able to make the first three calls per month to directory inquiry services free of charge. "BTC confirmed in its letter of 18 January, 2012, that the three free calls per month, by business, to DQ services are applicable to each respective telephone number assigned to any business. Therefore, in the instance of a multi-line business, free calls apply to a specific telephone number irrespective of the number of lines associated with that telephone number. "It is also URCA's considered view that businesses have the option of recovering the cost of the service through other mechanisms such as general sales revenue. This is standard practice by businesses around the world. URCA also considers that business customers are more likely to have regular access to the Internet and can avail themselves of updated information available via BTC's online directory." BTC previously bundled directory inquiry services with its monthly access charges for fixed-line services.