Digicel: We followed the letter of the law

SUNDAY, NOVEMBER 20: Digicel said it was “no secret” to Government it intended to offer long distance service and Internet service after the purchase of Transact in September.

Digicel Bermuda CEO Wayne Caines said any frustration being directed at the company should be laid at the feet of the Telecommunications ministry.

The purchase of Internet service provider Transact by cell phone company Digicel has not been received with open arms with others in the telecommunications industry.

They feel Digicel has jumped the gun on reform within the industry.

Digicel has put on hold its plan to offer long distance service as it’s a subject of a December court case.

Last week’s announcement by Digicel that it was slashing prices on Transact’s Internet service by as much as $10 per package and rebranding it Digicel Internet, also has not gone down smoothly.

Mr Caines said: “Any frustration should be aimed correctly at the ministry instead of the company that is following the correct process in it all.

“We followed the letter of the law — we received our licences. The application process saw it go to the Minister responsible for Telecommunications; to the Registrar of Companies; To the Minster of Trade and Industry; To the Bermuda Monetary Authority; — we clearly indicated that we wanted to launch a company.

“There were certain parameters we had to adhere to; certain hurdles we had to jump and we did so at each and every occasion.

“We also went to the Attorney General so we’re sort of miffed now as to where all the consternation would come from.

“Did Digicel jump the regulatory gun? We’re totally confused by this.

“These questions are being asked in the same year in which an amalgamation was allowed of M3 and CellularOne. A market of three cellular phone providers was reduced to two.

“Is that not flying in the face of regulatory reform?

“In the same year Bragg, the company from Canada, came in and bough Cable & Wireless. They also bought a share in Quantum Communications.

“We see the landscape is changing.

Mr Caines added: “We also see announcements from North Rock that they will be entering the mobile phone business.

“Digicel is now trying to diversify and people are now suggesting that we circumvented the regulatory reform?

“It’s nonsense.

“What’s most important is that the market is changing and the market has a lot of verve and a lot of passion to it.

“There is a hearing before the Supreme Court December 12 to 16 where our competitors can put their arguments before the Supreme Court with what’s happening to long distance — and that is their right.

“The evidence will show and bear fruit that we, at every stage, followed the process,

“We look forward to bringing the customers of Bermuda long distance.

“We look forward to the opportunity, within the confines of the law and the restrictions of the law, to offer long distance.

“There are restrictions that have been put in place on us and we will do so.”

Mr Caines said that in meeting with the relevant ministries Digicel “made clear to the Government” what they intended to offer after the purchase of Transact.

He said it should come as no surprise to the ministry that Digicel intended to offer either long distance service or Internet service after the buy out.

“We bought in the Gazette the application for our purchase, unlike any of the other applications.

“This was no secret — we didn’t do this under the cloak of darkness. We did this in the cool spotlight of public scrutiny.

“This will stand up in court and we’re confident of this.”

He said the Telecommunications Act was written in 1986 before the invention of Skype, Vonnage and MagicJack.

“Are they going to take Skype to court? Are they going to take Vonnage to court? Are they going to take MagicJack to court?

“We have to realize the time are turning.

“Should the Bermuda Government have acted quicker in bringing regulatory reform?

“The answer is yes?

“Could a company such as Digicel complain  and shake our fist in anyone’s face?

“We had to continue to morph our business to be successful to navigate through difficult economic times.”

Frank Amaral, COO of CellOne, said after Digicel was told to put their long distance plans on hold by the courts: “As a leader in Bermuda's wireless sector we appreciate the competitive pressures to come to market with enhanced offerings but this needs to be done within the confines of the rules, after all we are a regulated industry.

“They seem to be surprised by the outcome but they have known all this time that the only way a mobile subscriber in Bermuda can use an ISP for long distance service is to use a prepaid card and to dial an access number. Only through a Class A, like TBI, can one dial directly from their mobile phone.”

In the 2007 Throne Speech, Government announced its intention to revise the telecommunications industry with one of the key provisions “Unified communications licences will replace the existing segmented telecommunications licences.”

Four years later, Government has yet to enact the new single licence system, although in a meeting with telecommunications companies last month at the Fairmont Hamilton, it said that would move forward next year.

Part of that would include higher fees by Government as a way to increase its revenue, which would most likely be based on to customers.