Guernsey’s business community heard an update from CICRA (Channel Islands Competition and Regulatory Authorities) on the island’s telecommunications infrastructure as part of the Heritage Insurance-sponsored IoD lunchtime lecture series.
CICRA interim chief executive, Michael Byrne, explained CICRA was focussed on making markets work better with the primary goal of furthering the interests of consumers.
“Fairer markets deliver better outcomes to consumers and to the health of the economy, and that leaves us all better off. Competition is not only the basis for protecting consumers – it also drives economic progress,” he said.
Focussing on the telecommunications market, Mr Byrne outlined CICRA’s activity around 4G spectrum licensing, business private circuits and broadband.
“4G represents 80% more spectrum than 3G and will support delivery of data services on our portable devices that are far quicker. CICRA is also using the award process to level the playing field between new and legacy telecommunications companies,” Mr Byrne said.
He explained that a competitive process for the award of 4G spectrum was underway and successful operators would be announced in July.
“This growing role of spectrum is expected to play a larger role in the telecoms landscape as people rely less on fixed telecom services and make greater use of more advanced mobile services,” he said.
Mr Byrne said CICRA was ensuring that, with the advent of 4G and the more sophisticated streaming that will come with it, consumers were not subjected to data roaming “bill shock”.
In addressing the business market Mr Byrne said that businesses were increasingly reliant on high speed off-island connections to transact with customers and other back office locations. File volumes and sizes were increasing both on the corporate wide area network and front-facing business websites and companies were using more data rich services such as Cloud-based tools as well as HD video conferencing.
In setting out some of the history to trends in off-island connectivity prices, he said: “Given significant investment, a choice of suppliers and the number of customers coming to the island, CICRA’s predecessor decided to go no further than to freeze prices by the dominant player, Sure, and off-island prices have therefore stayed below inflation since 2008,” he said.
“A different judgement was called for in on-island wholesale prices where since 2008 the regulator had required significant reductions in Sure’s charges.”
Mr Byrne said that times had changed and regulation would need to adapt to a different environment. Telecom costs are now higher up the priority list for many businesses and the States of Guernsey is supportive of pricing models for business connectivity services that are a lot lower, in order to attract a different type of business in a different economic context. With only two operators in the business market there is less choice than there was before and there is a sense from customers that competition for their business is not particularly intense.
“In this context, we see our role as creating the means for alternative business models to have a chance to prove themselves. The market can then decide which pricing approach, technology or business model wins out. We’re specifically focussed on resetting on-island wholesale prices to ensure they are fair and opening choice to alternative business models.”
In considering broadband Mr Byrne said that ADSL technology was ‘much maligned’ but retail prices had dropped considerably in recent years and quality had improved.
He said the perception was that the broadband service in Guernsey was less than perfect but, he explained, there were many factors that impacted on speed and quality of service and that commercial incentives may not be sufficient to address these.
Citing several other locations including the UK and Australia, who in pursuing policy goals had seen millions of pounds invested by governments to raise the standard of broadband coverage and speeds, Mr Byrne indicated the States of Guernsey was in the process of assessing its policy objectives in this area and looking carefully at how best it might achieve those.
Category: Finance & Business