Suva, Fiji:  Mobile and fixed line customers can expect a reduction in call charges following the reduction in interconnection rates determined by Fiji’s Commerce Commission.

The Commerce Commission announced the binding determination yesterday, noting that the current local interconnection rates were way above the rates that existed in comparator economies worldwide.

The current 28 cents a minute mobile termination rates will be reduced over a period of three years to 11.5 cents a minute.

The fixed line rates will also reduce from the current 9.9cents a minute to 4.5cents a minute.

The results of the termination rates set by the Commission followed a substantial market study that began in May and ended in October last year.

“This should be good news for the consumers and business community as well, as we will now expect to see a good level of competition resulting in competitive prices," said Commission chairman Dr Mahendra Reddy.

He said the study showed that all operators in Fiji, mainly Vodafone Fiji, Digicel Fiji and Telecom Fiji “have substantial market power”.

“This particular conclusion from that substantial market power study resulted in the Commission deciding to set prices,” Dr Reddy said.

He said if a call was posted into their network, the operators could decide what the termination rate should be, after which research began to see the most appropriate interconnection rate for Fiji operators.

Dr Reddy said the operators were informed yesterday immediately after the Commission finalised its determination.

He said the telecommunication players should welcome this development as there would be a single mobile and fixed termination rate, thus a level playing field.

“In setting the rates, we were mindful of the level of investment operators have made, the business plans that they have and therefore, we have adopted a glide-path approach meaning that the interconnection rates that we have will slide down towards the cost model rate over a three year period,” Dr Reddy said.

He said the mobile and fixed line termination rates will decline annually over three years until it reached 11.5 cents and 4.5 cents a minute respectively.

“The first decline is from 28 cents to 23 cents and it will continue to decline until it reaches 11.5 cents,” Dr Reddy said.

He added that the fixed termination rate similarly will decline to 4.5 cents a minute at the end of three years.

He said operators had been informed that the Commission would carefully and closely monitor the market “to ensure that the changes and the trend in the wholesale market with respect to the interconnection rate should also translate into decline in retail rates”.

“Meaning that with immediate effect, I am expecting that the retail rates in the telecommunication sector should decline," Dr Reddy said.

Application of the new rates has been backdated to November 17 last year when the price control order became effective.

Digicel Fiji chief executive Matt Davey did not say much except to welcome the determinations of the Commerce Commission and “its hard work on these issues, particularly the work of Commissioner Reddy”
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Vodafone Fiji was to have made a statement on its position on the new termination rates yesterday.

“However, we have held this off until such time we get clarifications on some aspects of the determination and how it applies to the network operators. Parts of announcements in our view may be a bit ambiguous in its applicability and we seeking further clarifications from the Commission before we can make an informed comment later,” Vodafone's manager corporate affairs Shailendra Prasad said.