Cable & Wireless puts case for telecom licence

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Around 50 industry specialists and members of the public came to the Town Hall to hear Cable & Wireless present its case.

The telecoms giant, which bought out Guernsey Telecom last year, has submitted an application to operate in Jersey which is being considered by the Jersey Competition Regulatory Authority.Stewart Solomon, director of business development at Guernsey Telecom, said the firm believed ‘passionately’ that telecommunications could drive forward the economic development of the Island.Mr Solomon said that if their application was approved, Cable & Wireless would improve the Island’s competitiveness, create new jobs and develop new business within the economy.

It would also drive down costs for customers, he claimed.’We will recruit local people, not into back-office jobs but into challenging, front-line jobs,’ he said.In return, the company would expect full support from the States in terms of housing, licences, and infrastructure, the removal of legal and economic barriers and ‘firm but consistent’ regulation.Mr Solomon revealed that the Regulation of Undertakings Department had already agreed to their request for enough staff to fuel a three-year expansion programme.Asked to comment, the chairman of Jersey Telecom, John Henwood, said he felt in a ‘no win’ situation.

‘If I make a strong statement in opposition, Jersey Telecom will be accused of protectionism and fear of competition.

That is not the case.’Mr Henwood suggested that if the rival company was granted a licence there was a danger that the infrastructure created by Jersey Telecom over many years would be duplicated.

‘We do not feel we know enough about Cable & Wireless’s application to comment.’He added that he hoped the JCRA would be as critical of any ‘gold plating’ of services – particularly in relation to third generation mobile technology – as it had been of Jersey Telecom.

The JCRA last month froze Jersey Telecom’s prices for six months, pending an investigation.The chief operating officer at Newtel, Jeremy Swetenham, said a potential abuse of power could develop if the key newcomer to the Jersey market already had significant power in Guernsey.Mr Swetenham suggested there should be a common approach across both islands, maybe even a joint regulator.

‘In principle we welcome the entry of other competitors into the marketplace, but we have been concerned at the pattern of behaviour that Cable & Wireless has exhibited over the recent months in Guernsey, which has indicated a desire to maintain a near monopoly position in Guernsey and stifle market entry.

‘No doubt Jersey Telecom has the same desire for Jersey.’Questions from the audience – which included a number of representatives from the financial services sector – ranged from technical queries to personal interests.Greg Branch, a partner at Deloitte & Touche, said it was unfortunate that a public debate of this kind had not been held earlier.

Martin Bralsford, chief executive of CI Traders, asked what the purpose of the hearing was and why a licence system was in place.JCRA chief executive Charles Latham said the States had decided on a licensing system as part of its Telecommunications Law, although the rest of Europe was currently moving towards an authorisation system where anyone would be able to operate if they met the minimum criteria.Rosemary Marr, who has worked in the finance industry for over 30 years, said she would expect the existing provider to suffer as trained staff were poached by the new firm.Ms Marr said she hoped the regulator would apply due diligence to the Cable & Wireless application, particularly its reputation in other islands.

‘In the Cayman Islands there has been some adverse publicity in relation to illicit phone tapping,’ she said.St Helier Deputy Philip Ozouf said he believed there was a case to be made for a Channel Island regulator and hoped that would be taken on board by the Economic Development Committee.Barry Jenkins, a retailer representing the Jersey Business Venture, questioned why Cable & Wireless would need help from the States over housing if they intended to employ local people.

‘This is a very difficult place for us to employ staff.

We are not able to employ the numbers of staff we wish to for our individual businesses.

I would ask how the JCRA feel about predators in the employment market.’A representative of Nitel said that since Cable & Wireless had come to Guernsey he had seen improvement in the services offered.

Andrew Jarett, of Foreshore, said that if prices came down it would definitely open up the number of markets Jersey could attract.But Paul Marett, managing director of Itex and representing the Institute of Directors, asked how the JCRA intended to monitor prices.Deputy Patrick Ryan, who is currently chairing the competition sub-committee as a member of Economic Development, said he had ‘learned a lot’ during the meeting.

‘I was very interested in the question of a pan-Island regulator and we should be looking at that and talking to Guernsey,’ he said.

‘The committee will be taking these matters on board.’

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