The 500-year-old proverb that “fair exchange is no robbery” has become acceptable but only under normal circumstances.

However, the circumstances surrounding the Digicel/Claro asset swap, whereby Digicel sells its business in El Salvador and Honduras to Claro’s parent, American Movil, and buys Claro’s business in Jamaica is far from normal as it leaves two third parties — the Jamaican customer and LIME — at a disadvantage.

The deal, which serves to increase Digicel’s dominance in the Jamaican market, is not good for customers and is unfair to LIME, which has been trying to reduce prices and improve on service delivery through competition. As a result, LIME will not be able to compete with Digicel on a level playing field.

Already, Digicel has been allowed, unchecked, to charge a much higher interconnection rate to LIME customers calling Digicel numbers than LIME charges Digicel customers calling LIME numbers. Digicel tried to remove attention on the rates by agreeing to reduce calling rates across networks by $3, to $14.70 during peak ours, and by $2, to $13.80 during off-peak hours. This reduction was considered inadequate by then Government minister Karl Samuda and the Opposition spokesman Phillip Paulwell.

It now costs LIME customers $12.00 flat to call Digicel, whereas before the deal it cost them just $5.00 to call Claro and vice versa.

The effect of the deal is that LIME customers may soon dash their LIME sets and buy Digicel’s. This is so because most Jamaicans are Digicel customers — some two million and Claro’s half-a-million — compared with LIME which has just a quarter of this.

Jamaican customers, who had been addressing the problem by buying into both services, which is a waste of money, may finally succumb to Digicel’s dominance.

It is in this effort to maintain a competitive spirit in the market and protect customers from price leadership by any one provider that Bruce Golding approved the deal with the caveat that the Claro operation taken over by Digicel be run separate from Digicel’s original business; and appropriate legislation enacted to protect customers.

But no sooner than he had handed over the baton to Andrew Holness, Golding’s good sense was trashed with the removal of the conditions. Now, Digicel is planning to integrate Claro’s customers into its original network, thus circumventing the obligations contained in the Claro licence in terms of type of facility and specified service, interconnection rates, licence limitations and network expansion to 90 per cent penetration. “Fulfillment of these obligations will be vigorously monitored and enforced,” Golding had said at the time.

Now, there are no conditions to the deal, which has been challenged in the courts by the Fair Trading Commission under Section 17 of the Fair Trading Act 1993, which Digicel has challenged has no jurisdiction on the transaction of the deal. God forbid if the Supreme Court rules in favour of Digicel, which means that the deal will go through. If not, however, the FTC can then challenge the deal on the basis that it is anti-competition.

LIME has joined FTC as an interested party.

All this is coming at a time when LIME is preparing to roll out cheaper and improved services to customers. In the past four years, LIME has invested some $17 billion to improve its services, even as it has been loosing money. And if the deal goes through it may not invest further, continue to lose revenue, and eventually fade into oblivion and give Digicel a virtual monopoly, which will bring to nothing all of Paulwell’s efforts to liberalise the telecommunications sector.

Let us not forget that LIME’s senior management team — Chris Dehring, Garry Sinclair, Stephen Price, Tara Playfair and Kamina Johnson-Smith — are making a valiant effort to revitalise the brand and offer a first-class service.

Digicel claims to have the bigger, better network. Of late its network has been charaterised by poor service and dropped calls, and everybody knows this. So in effect Jamaicans are paying a high price for a poor service. How can that be? And this situation will continue to happen now that competition is restricted. In other words, Jamaicans get the short end of the stick.

We are already paying exorbitant electricity prices, primarily because JPS has no competition. How can the Government allow itself to repeat the same folly in the telecoms sector? The market was much more vibrant and competitive with three players instead of just one. It wasn’t too long ago that Claro reduced its rates to 4.99 per minute and both LIME and Digicel were forced to sit up and take notice. In a little under two years Claro had 500,000 customers as people flocked to their service. The Digicel /Claro deal makes the mobile telephone sector a one-horse race, just like the electricity sector and look what is happening there.

We are already paying exorbitant electricity prices, primarily because JPS has no competition. How can the Government allow itself to repeat the same folly in the telecoms sector? The market was much more vibrant and competitive with three players instead of just one. It wasn’t too long ago that Claro reduced its rates to 4.99 per minute and both LIME and Digicel were forced to sit up and take notice. In a little under two years Claro had 500,000 customers as people flocked to their service. The Digicel /Claro deal makes the mobile telephone sector a one-horse race, just like the electricity sector and look what is happening there.

Digicel makes super profits and it is said to be one of Jamaica’s leading corporate citizens. If that is really the case, why doesn’t it give cash-strapped Jamaicans a break and reduce its high rates? I’m sure it would still continue to make high profits.

Minister Paulwell should be guided by what transpired with the AT&T/T-Mobile deal in the United States. Last year, the Justice Department filed a suit to block AT&T’s US$39 billion deal to buy T-Mobile USA on grounds that it would raise prices for consumers. The Government contended that the acquisition of the No. 4 wireless carrier by the No. 2, ie AT&T, would reduce competition.

At a news conference Deputy Attorney General Jamaes Cole said the combination would result in “tens of millions of consumers all across the United States facing higher prices, fewer choices and lower quality products for mobile wireless services”.