Jersey’s Competition Regulatory Authority (JCRA) has concluded a review of competition in the market for business connectivity. As a result, JT will have to take further steps to open up the wholesale market to other operators and will continue to be subject to price controls.
The business connectivity market includes leased lines and other services which play an important role in business communications and are used to support a wide variety of applications in both the public and private sectors. They are dedicated private circuits that provide a high level of network privacy, security and resilience to crucial areas of the economy including finance, health, communications (in particular mobile backhaul) and government.
Data shows that there were 1,005 leased lines in use in Jersey in 2019, worth £11.8m in annual revenue, or 10% of the overall wholesale market. JT is the largest provider of leased line services, which it also supplies to other telecommunication companies who want to retail the product to their customers.
By directing JT to supply wholesale leased lines to other operators, the JCRA is promoting effective competition and choice in the market. The price at which JT can offer wholesale leased lines to other operators has also been capped, at 31% below the retail price, which equates to a further reduction of 11% on JT’s current wholesale prices. This will provide a further opportunity for Jersey businesses to choose where they acquire their business connectivity from and potentially reduce their costs, which should ultimately benefit consumers.
The JCRA has also developed a more robust regulatory framework for the supply of wholesale leased lines enabling other licensed operators to migrate services while also providing greater transparency and certainty for all business users.
At the same time the JCRA acknowledges the investment by JT in the Island-wide fibre network and is therefore proposing a fair and proportionate remedy to balance JT’s significant market power with its need to achieve a reasonable return on its investment.
Peter Hetherington, Senior Economic Case Officer for the JCRA said, “Business connectivity services are vital in supporting the Jersey economy and ensuring it continues to grow and remain competitive. This consultation was an extremely important and valuable exercise that has resulted in better competition in the business connectivity market that will lead to increased choice, lower prices, and improved benefits for customers.”
