GUERNSEY’S regulator said yesterday that it would not yet intervene to bring down the cost of phone calls. The launch last week of Wave Telecom’s mobile network resulted in its rival, incumbent operator Cable & Wireless, pushing up the price of calls from fixed to mobile phones – and holding its rival responsible.

The Office of Utility Regulation said it was aware of concerns that competition had driven prices up rather than down but would take no action for now.

‘The OUR has taken the view that it would first give competition the opportunity to address this concern as we strongly believe that competition rather than hands-on regulation is the most effective and quickest way for customers to benefit,’ said regulatory manager John Curran.

‘Should the OUR find that this is failing, we will consider what further regulatory measures are needed.’

He added that competition was less than a week old, despite the process to open up the market having begun in October 2001.

‘The OUR is very firmly of the opinion that effective competition will bring benefits for consumers. It is true that certain charges have increased but, equally, there have been significant price reductions on calls to numerous destinations, in particular to Jersey and the UK. This, we believe, is singularly as a result of the threat of competition.’

The OUR said it had been notified by C&W of charges it intended to levy for calls for its own customers, as it was required to do under its licence.

The regulator was concerned that the charges were discriminatory because calls to Wave mobile customers were significantly higher than calls to C&W’s.

‘The OUR’s concern is that pricing behaviour of this nature may result, in the longer term, in customers actually having less choice. If an operator is able to price in a way that makes its network unfair, it has the potential to damage competition and leave customers with less choice, giving that operator greater freedom in the future to price in a way that – without regulatory intervention – could be detrimental.

‘While the concern with regard to discrimination has been addressed, there remains the concern about the possible excessive price of calls to such services and these will be considered further in the context of the price control review that is under way.’

The OUR last week launched a major consultation on the price controls that will apply from next April.

All services are up for review including local calls, line-rental charges and fixed-to-mobile and mobile-to-mobile calls. It will be the second such price control on C&W.

‘Among the factors we will be considering will be the way in which prices have changed under the existing price control, the degree to which C&W met its obligations and the way in which it implemented price changes.’

Deputy Dave Jones, a vehement opponent of the States’ sale of Guernsey Telecoms to Cable & Wireless, said the appearance of competition in the marketplace had cost the customer dearly.

‘It’s crazy,’ he said. ‘It goes exactly against the concept we were assured of when Guernsey Telecoms was sold to C&W.

‘I feel that the public have once again been betrayed by the sham that is commercialisation.’

Deputy Jones said the OUR had failed to act in consumers’ interests.

‘It is there to protect consumers against profiteering and companies who put barriers in the way of real competition. C&W has twisted and turned at every opportunity to stop real competition coming in and because of that, the consumer has to pay.

‘It’s about time the OUR got its act together and started protecting consumers. They have only to look at their bills to see the huge increases of the last 18 months to two years. This latest rise will do nothing to help the people on low incomes referred to in the recent poverty report.’