BASSETERRE, St. Kitts: The initiative of the St. Kitts-Nevis Labour Party Administration, spearheaded by then Minister of Communications, Cedric Liburd, to break the monopoly of the communications giant Cable & Wireless and reduce telephone rates in the Eastern Caribbean, continues to bear fruit. During a meeting of the Eastern Caribbean Telecommunications Authority (ECTEL) in St. Lucia last week an agreement was reached with Cable & Wireless on a new price regime with effect from December 1st 2004. Under the terms agreed to by OECS Ministers for Telecommunications and Cable & Wireless, fixed line customers in the ECTEL Member States could pay as much as 22 percent less for their fixed-to-fixed local calls from 1st December 2004, with a further 20 percent reduction for fixed-to-fixed local calls in December 2005. ECTEL and Cable & Wireless in a joint statement said local calls on the fixed network will decrease from 9 cents (peak period), 8 cents (off-peak period) and 6 cents (weekends) to 7 cents, 5 cents, and 5 cents per minute respectively on 1st December 2004. Off-peak and weekend rates will further decrease to 4 cents and 4 cents respectively on 1st December 2005. The agreement also makes provision for additional benefits to consumers of average reductions of 10 cents per minute for fixed-to-mobile calls by 1 December 2005. Both residential and business consumers will benefit from these changes. There is yet more value offered to residential customers - residential fixed customers will get 60 free minutes of local fixed-to-fixed calls in the evenings and on weekends with effect from 1 December 2004. This means that as much as 25 percent of existing users will have no payments to make for their evening and weekend locals calls and this percentage could increase as the volume of free local calls goes up from 60 to 80 in December 2005. The Price Cap Plan must now be approved by the National Telecommunications Regulatory Commission (NTRC) in St. Kitts and Nevis and each ECTEL Member State. However, all sides are confident that once implemented, the new regulatory pricing mechanism will result in benefits to consumers of fixed line services throughout the ECTEL Member States. Once approved by the National Telecommunications Regulatory Commission in each country, the Agreement will commit C&W to the specific rate reductions outlined above, effective from 1 December 2004, over a two-year period. The agreement also imposes a “price cap” regime of regulation on C&W. This regime will require C&W to realize efficiency gains in each year and to pass on some of these gains to its customers in the form of lower rates. A price cap regime is a method of regulating the rates charged by a utility company to its customers. Under this price cap plan, maximum rates, or “caps,” are placed on telecommunications services, and the company is not permitted to raise its rates above those levels. The company is also expected to make efficiency gains in each year which are then passed on to customers in the form of rate reductions. The Agreement also makes provision to harmonize rates across the ECTEL Member States with divergences for some services, such as local calls, limited to 35 percent. The agreement was formally signed at a ceremony held at the Grand Beach Resort in Grenada on Friday 30th July, 2004 and covers a four-year period for the Member States of the Commonwealth of Dominica, Grenada, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines. Reprinted from Caribbean Net News caribbeannetnews.com