Digicel can continue free Internet promotion

Round one to Digicel.

Last month Logic Communications launched a complaint against Digicel for its free one year Internet promotion.

The promotion allowed new customers or those who had less than six months on their existing contracts to sign up for its post paid and/or data services for a minimum of $100 per month for a minimum of 24 months, and they would be eligible to get free 6Mb Internet service for a year. 

Logic filed an official complaint with the telecommunications Regulatory Authority .

In the complaint, Logic wrote: “Today, given the promotion referenced above, the RA’s concerns have come true and quick action is required to prevent any resulting harm. Digicel’s bundling in this manner raises significant competition concerns.

“It is using its revenues in mobile services to subsidize the giveaway of Internet services. It has SMP in mobile services. Its competitors for Internet services (other than BDC [CellOne]) cannot offer the same promotion. The giveaway of Internet services in this case is predatory and anti-competitive. Given Digicel’s SMP, this predatory tactic violates the prohibition of abuse of dominant position in section 85 of the RA 2011.”

Logic requested that Digicel be made to immediately stop the campaign. Digicel was given a week to respond to Logic’s complaint and afterwards the RA ruled “it is not convinced that the potential harm that could be suffered by market players (including Logic) and/or the consumer, is so serious that Digicel should be forced to suspend the Free Internet promotion to prevent it”.

However, the RA aded: “There is no reason to consider the Free Internet promotion is likely to cause harm that could not be rectified and/or satisified by fine or some other means in the event Digicel is found to be acting in an anti-competitive manner.”

The RA said that because the Free Internet promotion is only for five weeks to a limited number of customers, the likelihood that Digicel’s offer “will cause harm in the ISP market by driving out its competitors through a downward trend in pricing is low”. 

The Regulatory Authority added that any major market shift “is more likely to be a result of new entrants into the market and the competitive pricing from numerous carriers than” Digicel’s Free Internet offer. 

“Logic currently holds the largest share in the ISP market, the RA would find it difficult to conclude... that the free Internet  offer will cause serious harm to the ISP market, let alone that its effect would be so serious to warrant the very drastic step of ordering Digicel to suspend the promotion.”