{"id":4115,"date":"2012-06-15T06:58:15","date_gmt":"2012-06-15T11:58:15","guid":{"rendered":"http:\/\/www.ict-pulse.com\/?p=4115"},"modified":"2012-06-22T06:53:58","modified_gmt":"2012-06-22T11:53:58","slug":"are-lime-jamaicas-mobile-rates-reductions-too-little-too-late","status":"publish","type":"post","link":"https:\/\/ict-pulse.com\/2012\/06\/are-lime-jamaicas-mobile-rates-reductions-too-little-too-late\/","title":{"rendered":"Are LIME Jamaica\u2019s mobile rates reductions too little too late?"},"content":{"rendered":"

LIME Jamaica will be introducing a new TALK EZ mobile calling plan that offers significantly discounted rates, but is it enough to signal to the market that it is still a contender in the Jamaican marlet?<\/em><\/p>\n

Yesterday, LIME Jamaica announced that as of today, 15 June, it will be offering a \u201cTALK EZ<\/em>\u201d plan that offers significant reductions in mobile rates on-net calls and international calls to the USA, Canada & UK landlines (Source: LIME<\/a>). The reductions are by as much as 63% for prepaid local calls, were reportedly precipitated by \u201cnew opportunities brought about by changes to the Telecommunications Act\u201d<\/em> (Source: The Gleaner<\/a>).<\/p>\n

TALK EZ will be one many calling plans offered by LIME. Hence consumers are required to opt-in for this new plan by dialling a special code. Furthermore, for those who might want to switch to LIME, the company is offering as incentives, a significantly discounted (JMD\u00a0999\/USD 11.35) handset, along with discounts on its SIM card.<\/p>\n

However, over the last several months much has been made about the massive financial losses<\/a> that LIME has been experiencing in Jamaica, and even last month senior executives indicated that the parent company, Cable & Wireless Communications would be subsidising its operations to keep it afloat<\/a>. Hence these drastic rate reductions are, at a minimum, likely to cause a stir in the local industry, but, when all is said and done, is it enough to change the tide in LIME\u2019s favour? Or is it too little, too late?<\/p>\n

How does the TALK EZ plan compare?<\/h3>\n

As at the writing of this post, the full rate sheet had not yet been made publicly available. Nevertheless, based on what has been gleaned from LIME\u2019s press release<\/a>, Table 1 compares calling rates of the generic \u201cAnytime\u201d plan and the TALK EZ plan for local calls from LIME Jamaica\u2019s mobile network.<\/p>\n

\"\"<\/a>

Table 1: Comparison of local calling rates for LIME Jamaica’s Anytime and TALK EZ plans (Source: LIME Jamaica)<\/p><\/div>\n

Based on calling rates alone, the TALK EZ plan is likely to significantly reduce the amounts spent by LIME customers on mobile service. (Should the plan have a monthly subscription, for example, which has not yet been revealed, this might not be the case.) In our Snapshot of monthly mobile spend across the Caribbean<\/a>, the most recent of which was published in May, we have been using three baskets of mobile services comprising different volumes of calls, SMS and MMS services that might cater to a Low Volume (LV), Medium Volume (MV) or High Volume (HV) user. To produce our results, we averaged the rates from the two largest mobile providers in a particular country, as applicable. In the case of Jamaica, our calculations included rates from both LIME and Digicel, and for the former, we used its Anytime plan. Hence Figure 1 shows the likely impact of the TALK EZ plan on monthly spend, versus that previously calculated in our May Snapshot.<\/p>\n

\"\"<\/a>

Figure 1: Comparison of monthly spend for mobile services based on new calling rates for LIME\u2019s TALK EZ plan, and those based on market averages (Source: ICT Pulse)<\/p><\/div>\n

Across the three basket of services, monthly spend for LIME customers decrease by a minimum of 48%, for a LV Basket, to as much as 57%, for a HV Basket of services.\u00a0 For an LV Basket, LIME customers may spend as little as USD\u00a02.89 (JMD\u00a0252.79) per month, as opposed to the earlier market average of USD\u00a05.52 (JMD\u00a0483.37) per month. Similarly, for a HV Basket, the monthly spend would decrease from USD\u00a027.99 (JMD\u00a02,449.46), to USD\u00a012.14 (JMD\u00a01,062.62).<\/p>\n

The impact of those monthly spends for the pre-defined baskets of services, against monthly income, are shown in Figure 2. The average monthly income in Jamaica, based on per capita GDP figures, has been estimated at approximately JMD\u00a035,772.06 (USD\u00a0408.25).<\/p>\n

\"\"<\/a>

Figure 2: Comparison of percentage of monthly income spent on mobile services for LIME\u2019s TALK EZ plan, and using rates based market averages (Source: ICT Pulse)<\/p><\/div>\n

The percentage reductions in the impact on monthly income across the three baskets of services are identical to those realised for the monthly spend: 48%, for a LV basket; 53% for a MV Basket; and 57%, for a HV basket. Hence LIME customers are likely to find these new rates considerably more affordable, since a LV basket of services will consumes as little as 0.71% of their monthly income, to as much as 2.97%, for a HV basket of services.<\/p>\n

Will throwing down the gauntlet work?<\/h3>\n

Without a doubt, LIME\u2019s new rates will be a shot in the arm for the mobile market in Jamaica. Moreover, this initiative may signal that LIME is still a contender in a market where its competitor, Digicel, reportedly has a customer base that is at least twice that of LIME\u2019s. However, what are the likely outcomes of this move?<\/p>\n

First, expectations that Digicel customers will abandon that provider to take up LIME might not necessarily happen in droves or in numbers substantial enough to affect Digicel\u2019s market power. Throughout the years, Digicel\u2019s customers have been especially loyal to the company, and noting that LIME\u2019s mobile network coverage is less comprehensive in rural areas, consumers might have no choice but to remain with Digicel.<\/p>\n

Secondly, in the absence of mobile number portability, even if Digicel customers wished to switch to LIME to take advantage of the new rates, they would have to relinquish their existing mobile numbers, which many would find unpalatable. Some, however, might be prepared to purchase a separate LIME handset, but since Digicel\u2019s customer base is considerably larger than LIME\u2019s, persons might still find that an appreciable number of their calls are on Digicel\u2019s network. Hence Digicel would be better placed to offer attractive rates and incentives to their customers for services on their network.<\/p>\n

Finally, although Digicel (for whatever reasons) might wish to contest LIME\u2019s rate reductions as anti-competitive, and recognising that the absence of mobile number portability inherently works in Digicel\u2019s favour, it is likely to offer a plan that competes directly with TALK EZ. Nevertheless, it will be interesting to see, over the coming days, what Digicel\u2019s reaction will be to this new development.<\/p>\n

Final remarks<\/h3>\n

The next few months are likely to be a \u201cdo or die\u201d period for LIME, where it somehow must significantly alter its current trajectory, and return to profitability. It is only hoped that this new promotion is just the start of some far-reaching changes the company plans to introduce over the coming months.<\/p>\n

It is interesting to note that in Jamaica\u2019s telecoms sector, the focus is still on voice, and mobile\/cellular service, in particular. However, global trends, which are already becoming evident in Jamaica and the wider Caribbean, show an emphasis to data, specifically Internet technology, which can support voice, data, video, and Internet services. As a result, both fixed-line (voice) and mobile services providers have been experiencing reduced revenues, since consumers have alternatives \u00a0via the Internet that might be more affordable and convenient.<\/p>\n

Furthermore, Universal Access and Universal Service policies<\/a> in telecoms, have themselves widened to include Internet as a basic service: it is not enough to provide access to voice services. Hence it could be argued that LIME Jamaica could make a more significant impact if it strengthened its position in data services, especially mobile broadband, which is still quite expensive and not widely used by consumers.<\/p>\n

________<\/p>\n","protected":false},"excerpt":{"rendered":"

LIME Jamaica will be introducing a new TALK EZ mobile calling plan that offers significantly discounted rates, but is it enough to signal to the market that it is still […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","om_disable_all_campaigns":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[17,11,19,18],"tags":[53,59,84,54,98,12],"class_list":["post-4115","post","type-post","status-publish","format-standard","hentry","category-caribbean","category-ict-tech","category-mobile-telecoms-2","category-telecoms-2","tag-competition","tag-digital-divide","tag-interconnection","tag-jamaica","tag-lime","tag-regulation","et-doesnt-have-format-content","et_post_format-et-post-format-standard"],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2iE1G-14n","jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/posts\/4115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/comments?post=4115"}],"version-history":[{"count":8,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/posts\/4115\/revisions"}],"predecessor-version":[{"id":4125,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/posts\/4115\/revisions\/4125"}],"wp:attachment":[{"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/media?parent=4115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/categories?post=4115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ict-pulse.com\/wp-json\/wp\/v2\/tags?post=4115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}