LIME and Digicel in another legal battle

KINGSTON, Jamaica, October 29, 2009 – Telecoms providers LIME and Digicel are fighting over the Jamaica market again. This time LIME wants J$100 million (US$1.12 million) for a J$2.48 (US 3¢) minute difference in price Digicel which is charging for landline to mobile calls.

The British-owned telecommunications company this week filed a lawsuit in the High Court to force its competitor to lower the rates it charges to terminate landline calls, saying that the existing pricing structure is unfair and amounts to an abuse of its dominance of the mobile market.

According to LIME, Digicel been charging up to J$6.48 (US 7¢) per minute for terminating LIME calls on its mobile network, while the cost for Digicel fixed network users (only businesses at this stage) is J$4 (US 4¢) per minute.

And it says it wants J$100 million (US$1.12 million) in damages to compensate for losses it racked up because of this pricing.

“As things stand now, before LIME even looks to cover its own costs to set up a call from a landline to a Digicel mobile customer, it has to cover Digicel’s termination charge which, depending on the time of day, may range from J$6.48 (US 7¢) per minute for a local peak time call, to J$4.76 (US 5¢) for a local off-peak call. It is therefore impossible for us to cover our costs and meet or beat Digicel’s J$4 (US 4¢) retail rate,” said LIME’s country manager Geoff Houston at a press conference on Tuesday.

But Digicel has hit back at LIME, claiming that the legal move was an attempt to force Digicel’s business customers to pay more for its fixed wireless product. That fixed service, which started in 2007, is to be expanded to other consumers next year when Digicel launches its WiMAX service.

“C&W/LIME should stop wasting our and the court’s time and focus instead on its poorly served customer base and its next rebrand. Quite simply, having watched Digicel’s performance in the mobile arena over the last eight years, LIME is running scared now that the last remnants of its monopoly are under threat,” Chief Executive Officer Mark Linehan said in a statement.

The suit filed this week is just the latest in a series of legal battles the two are involved in. About 11 other matters are before the courts – eight filed by Digicel and the other three lodged by LIME.

One of those cases is scheduled to be heard in a judge’s chambers tomorrow.

It’s LIME’s J$3.9 billion lawsuit against Digicel, in which it is claiming the difference between payments per minute versus per second in respect of Fixed-to-Mobile (FTM) Interconnect Traffic. LIME claimed that Digicel unilaterally changed the payment regime in 2003 in breach of the interconnection agreement.