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The Fair Trading Commission has issued its Decision on the Price Cap Plan 2021 (PCP 2021), which will govern the adjustment of rates of the regulated telecommunications services of Cable & Wireless (Barbados) Limited (C&W).
The PCP 2021, which will be in effect from April 1, 2021 to December 31, 2024, is the most recent version of a framework which was first implemented in 2005 and is based on two service baskets for 'competitive' and 'non-competitive' services. The former category includes regulated services for which the level of competition is deemed to be sufficient to prevent excessive pricing by C&W. While these services will not be subject to an overall price cap, C&W must provide advance notification of any raise in prices.
Similarly, no overall price cap will be applied to 'non-competitive' services, which include all remaining regulated services. However, a price cap will be applied to standalone fixed telephony (landline) services including value-added services, as listed below:
a) Unlimited Local Calling
b) Call Waiting
c) Voicemail
d) Caller ID
e) Call Forwarding
a) Unlimited Local Calling
b) Call Forwarding
c) Automated Assistance for Customers
For these services, C&W's ability to raise prices annually will be restricted. Any increases must be below or equal to the level of inflation, or 3 percent a year if inflation exceeds 3 percent during that year. If there is a negative inflation rate, no price increase will be allowed.
The Commission determined that the application of a price cap was critical for these services, which are typically purchased by vulnerable customers and for which C&W faces no effective competition from Digicel anywhere in the country. The Commission also acknowledges that such customers are on the decline, as many others opt for bundled services from both C&W and Digicel. As such, the focus of the PCP now applies to a narrower set of services, in tandem with regulatory objectives and technological change, whilst maintaining a framework that remains adequate and responsive.
The Commission will, therefore, continue to monitor market conditions, including price and demand, for uncapped 'non-competitive' services and may introduce price regulation for these services if deemed necessary.
The PCP 2021 Decision may be accessed here.
March 12, 2021