Jamaica’s mobile telecommunications market has been described as “competitive”, according to an assessment undertaken by the Fair Trading Commission (FTC).
The Spectrum Management Authority (SMA) requested the assessment, as it sought to evaluate its Spectrum Cap Policy used to understand the level of competition in the market.
According to the FTC, the conclusion about competitiveness in the mobile market was arrived at following a benchmarking exercise which considers factors such as Jamaica’s regulatory environment and unilateral conduct between existing providers.
“This means that mobile telecoms operators are likely to increase their derived demand for mobile spectrum in the immediate future.”– Fair Trading Commission
While describing the in-market situation as ‘competitive’, the FTC noted that Digicel’s acquisition of Claro in 2011 had significantly lessened competition in the market.
“The overall conclusion, therefore, is that while the telecoms market in Jamaica is competitive, the sustainability of this environment is fragile, given that only two operators serve the market. Digicel’s acquisition of Claro in 2011 significantly lessened competition in the telecoms market in Jamaica,” read the report.
The report also points out that the situation being created by the pandemic may potentially make it more difficult for new players to compete in the space.
“One consequence of the pandemic is a significant non-transitory increase in the demand for mobile telecommunication services. This means that mobile telecoms operators are likely to increase their derived demand for mobile spectrum in the immediate future. If the spectrum assignment is not carefully managed, there is a risk that conditions of entry may no longer be easy if the available spectrum—in quantum or frequency, become insufficient for competitive entry,” added the FTC.
The FTC used the occasion to encourage Minister with responsibility for telecommunications, Daryl Vaz, to consider implementing recommended revisions to the pricing of spectrum as a measure to safeguard the sector.