Interconnection rates drop

Less than a week after approving the Cable & Wireless (C&W) buyout of Columbus Communications Inc, the Fair Trading Commission (FTC) has handed down a decision on the long-standing dispute regarding the Long Run Incremental Cost (LRIC) interconnection rates that telecoms companies pay to connect to the C&W network.

The regulatory body said today that, after an extensive study, fixed transit rates would move from $0.022 to $0.010 per minute; and fixed termination and mobile transit would both attract new rates of $0.011 per minute, moving from $0.030 and $0.022 per minute respectively.

Meanwhile, mobile termination will attract a new rate of $0.055 per minute, down from $0.255.

“This decision was made after the Commission completed a detailed review of interconnection costs. It required Cable and Wireless (Barbados) Limited, the dominant telecommunications provider, to develop the LRIC model based on costs that an efficient operator would incur in providing interconnection services to other telecommunications providers,” the FTC said.

The Commission said it determined that the new, reduced wholesale interconnection rates would be implemented using “a glide path, whereby 60 per cent of the reduction will be effective May 1, 2015 and the remaining 40 per cent reduction will be applied on April 1, 2016.”

The regulatory agency said that the provision of interconnection services based on the costs of an efficient operator was widely recognized as “an essential requirement for the creation of a competitive telecommunications market, as operators must terminate calls on each other’s network and, similarly, receive calls originating on another operator’s network”.

The issue dates back to 2010 when the FTC determined that C&W should undertake an LRIC study to determine interconnection costs and tariffs.


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