Jersey regulator launches review into phone pricing

There will be a full review of telecom company JT's pricing and efficiency after accounts showed the company was cross subsiding fixed-line services.

Andrew Risely from the Channel Islands Competition and Regulatory Authorities (CICRA) said the review would feed into decisions over future competition plans.

He said JT would be allowed to increase prices by 1.5% in line with inflation.

Graeme Millar, JT CEO, said that rise was "fair and reasonable".

He said: "Under the accounts we are required to produce, it shows we lose about 17% on our fixed business. If we were to not lose money on that business, or cross subsidise it from other areas, that increase would be required.

"We did not ask for a 17% rise. It is what would be required to stop the subsidy."

Mr Risely said: "JT submitted to us a view as to what they thought line rental should be based on data from separate accounts.

"We felt if we were going to give that sort of request proper scrutiny we needed to conduct a full review."

JT control the telephone lines and provide the majority of home landline services.

Mr Riseley told BBC News the review would allow them to give proper scrutiny and feed into consultation into possible competition for landline services.

"Given that JT and Sure in Guernsey are similar networks with a similar scale, and we are in a position to regulate them both, we felt we should look at why Sure asked for 1.5% and JT 17%.

"We will do a detailed analysis of accounts and working practices, to come up with a robust assessment of what line rental rates should be," he added.

He said any final decision made after the review would apply to prices in 2015.