Digicel, last week, paid in full money it was said to owe Cable and Wireless Jamaica (C&WJ) stemming from a five-year long court dispute over whether the telecommunications regulator, the Office of Utilities Regulation (OUR), should be able to fix interconnection rates between local telecoms.
The claim was for over $300 million, although the actual payment which neither company wanted to disclose was less, due to money Digicel held back in light of other funds owed by the British-owned telecom.
C&WJ has already cried victory for investors and consumers, savouring the ruling in the land's highest court, which overturned a ministerial directive issued by technology minister, Phillip Paulwell, back in April 2002, instructing the OUR not to intervene in the mobile market by setting rates on interconnection.
"The Court of Appeal decision reaffirms the independence of the regulator and this is important to investors," said Camille Facey, C&WJ's senior vice-president of legal, regulatory and public policy, in a statement to the Business Observer. "The decision also reaffirms the right of the regulator to oversee the mobile termination rates - this is in the best interest of consumers."
She was extrapolating that the OUR would be able to make a similar determination on mobile-to-mobile termination rates in Jamaica.
"(They) are excessively high and now that the Court of Appeal decision has reaffirmed the power of the regulator to regulate these rates we look forward to the OUR proceeding with the work it started in 2002 to ensure that the Jamaican consumer is protected from excessively high mobile rates," she added.
But the Irish-owned mobile company plans to appeal the matter in the UK Privy Council.
The firm believes that the regulator was "backhandedly setting Digicel's and Centenniel's termination rate," when it made the determination, according to a company statement.
Back in 2002, Digicel "took the position that the regulator is not authorised to set the rates of non-dominant operators," added the statement.
But C&WJ's claim that it was a victory for local consumers and investors alike riled Digicel, which had the opposite view.
"The effect of that certainly had not been to benefit the Jamaican consumer as the consumer who could potentially benefit were persons making calls into Jamaica," said the statement. "This was not an issue of benefiting consumers as the savings were not passed on; this was an issue of benefiting C&W's bottom line."
After Paulwell made the directive in April 2002, the OUR ignored it and issued a determination notice the following month, setting interconnect pricing on incoming international calls to mobile networks at a time when all international calls went through C&WJ.
In October of the same year, the OUR applied to the Supreme Court for judicial review seeking a declaration that Paulwell's actions were unlawful. The court found against the OUR in December 2003, which meant that C&WJ had to pay the difference between the higher interconnection rate and the OUR rate over to Digicel and Oceanic (now MiPhone).
That amount was in excess of $182 million, according to C&WJ.
Both the OUR and C&WJ appealed to the Court of Appeal, and in May 2007, the high court overturned the ruling in the lower court and found that Paulwell had acted ultra vires to his power when he gave the direction.
C&WJ demanded in excess of $300m from Digicel and over $8m from Oceanic, which both parties settled.
