Barbados phone rate increases on hold

BRIDGETOWN, Barbados, June 27, 2008 – Telecommunications giant Cable and Wireless (C&W) has been blocked from imposing any residential rate increases on Barbadians until 2010 at the earliest.

This is a result of a decision by the country’s Fair Trading Commission (FTC) to implement a rate freeze, starting August 1 this year and ending December 31, 2009, as part of its Price Cap Plan 2008, which runs from August 1, 2008 to March 31, 2012.

At the end of the rate freeze, said FTC Chief Executive Officer Peggy Griffith, any rate increase would be given in line with the country’s inflation rate.

“The company will be allowed to adjust rates in line with the inflation factor, as determined by the Retail Price Index, up to a maximum of 4.5 per cent,” she said.

“This means that even where inflation is greater than or equal to 4.5 per cent, rates can only be increased by 4.5 per cent. Only one increase will be allowed in a 12-month period.”

The decision has not gone down well with C&W, whose President Donald Austin expressed disappointment that the FTC refused to grant any flexibility for increasing rates during the first 17  months of the Price Cap Plan. He argued that the company was facing a number of pressures, including the increased cost of doing business.

The FTC plan also includes a cut in residential international direct dialing rates which are currently higher than business rates.

An initial reduction of 20 per cent must be implemented by August 1 this year, with additional five per cent cuts each year after that, up to 2011.