CABLE & Wireless could be charging customers too much in areas where there is no competition to keep other prices artificially low. The company’s policy will come under close scrutiny as part of the Office of Utility Regulation’s investigation into price controls.

C&W mobile users told the Guernsey Press yesterday that they felt they were being ripped off.

But a comparison of costs between the main UK operators and the two local companies showed that C&W’s basic cost was fairly representative of the industry, although its offer packages were limited and tended to treat mobiles like landlines.

The current controls under which C&W operates are up for review. New ones will apply for three years from next April.

‘We are aware that a significant concern for consumers is that while certain charges have reduced, C&W has increased prices for local services where competition is unlikely, in areas such as fixed-line rentals and calls,’ said regulatory manager John Curran.

‘Given the absence of alternative network operators, it is clear that these increases have been introduced in a segment of the market where customers have no choice and therefore cannot avoid the increases. This impacts on the customers.’

Mr Curran said international experience suggested that competition in that part of the market might never develop.

‘The concern this raises for the OUR is that C&W could be charging excessive prices in an area where it has an effective monopoly to enable it to provide lower prices where it may face competition.

‘It is concerns of this nature that we will be looking to address more fully in the new price control.’

He urged customers to make their feelings known to the OUR by responding to its consultation document.

But C&W’s marketing manager Steve Eldridge said there was independent evidence that its prices were good value.

He added that the company intended to cooperate fully with the review.

‘In general, prices in Guernsey are good value and this had been verified by studies such as that carried out by Oxford Economic Forecasting [published last December] which showed that telecoms charges were 35% lower in Guernsey than they were in the UK,’ said Mr Eldridge.

‘We carry out our own benchmarking as well which has, for instance, shown that exchange line rentals are half that of Jersey and the UK.

‘We think this is an important process being undertaken by the OUR and we will fully participate in the price control review.’

* The consultation document, 04/10 Price Control for Telecommunications Services in Guernsey, is on the OUR’s website at www.regutil.gg