From Tim Langlois.
CHARLES Webb, from the JCRA, claims 100 jobs have been created by other telecommunications companies setting up in the Island. However, how many staff were brought in from the UK and other destinations?

How much is the JCRA costing the taxpayers and how much are these people getting paid? Are they actually providing a good service to the people of Jersey?

We are going to have another 140-plus people, including Jersey Water staff, looking for jobs when there are already over 1,000 out of work. Let us hope Social Security can cope with an increase in demand, as at the end of the day it is this department which pays for those out of work, with our tax credits.

It will also mean a drop in tax revenues as more people end up below the tax threshold. The outcome? The government can fall back on the regressive GST to further impoverish the lower orders to make up any shortfall. At the moment 3%, and who knows, 10% within three years?

The fragmentation of the telecoms market, especially in a tiny place like Jersey, was never going to be viable. All the operators will have a tiny share of a minute customer base and they won’t be making enough money to invest so the Island will fall further behind in terms of technology.

There are only 80,000 customers over here, not 60 million. With a profit cake which is shrinking all the time, does anyone think that six companies can make a profit from an average of just over 13,000 subscribers each? Basic economics says this is a recipe for disaster.

As for Jersey Telecom, this will become a shell of a company and end up being sold for very little money to a private company. What benefit is this for the taxpayers who own it? JT will be squeezed out of the market place, meaning the Island will have lost control of the telecoms market.

The finance industry is at serious risk here and I can explain why. At the moment, JT have a good infrastructure to support finance. Who is going to pay for this in the future if JT aren’t around? Will a private company want these overheads or not? The infrastructure could start to fail, with little or no financing to maintain the network. Or they could hold the Island to ransom to pay for this, meaning yet more taxes.

The States are willing to take a gamble with the future of the Island’s economy to save a few pence on phone calls. What happens if these competitors say, at some time in the future, that there isn’t enough money to be made in Jersey and pull out? Who would provide all the services we take for granted now?

JT, which was worth a lot more to the States as a viable business in 2003, pre-competition, will become worthless or just a burden. Any eventual sell off will lose the taxpayer more money. As with BT, these new companies will only be interested in high worth customers and will cream off these, as we are starting to see, leaving JT with the sole responsibility of subsidising tariffs and customers for an outdated service like Primetalk (the OAP tariff) to the tune of £1 million a year.

It is interesting to note that no matter how wealthy you are, as soon as you reach pensionable age, you are entitled to a discounted scheme at the expense of other Island subscribers. Perhaps, if the States were to look closely at themselves and question their desire to provide such tariffs through their own company, JT would have been able to provide better deals for their wider customer base.

Many experts from the UK have told me and, indeed, experienced what will happen. Large hypermarkets set up in the UK run at a loss, give things away and keep going until they have no competitors. Then the price goes up, because you have no other option. Do the public really think free calls, texting, roaming and giving away TVs, DVDs and laptop computers, etc, will carry on?

Some still say ‘JT should have been sold’. Had JT been sold there would be a lot more people out of work by now. Many jobs would have been handled offshore. JT would have been broken up in time.

The damage has already been done and it can not be stopped now. JT should have been regulated from the beginning. Some of these telephone companies are the biggest in the world and the States have no control over them.

When they have the market dominance, which is only a matter of time, they will tell the regulator what they want. You only have to look back to the UK in the eighties when all the utilities were sold. Consumers in the UK have been rewarded with poor service, high prices and massive profits for shareholders.

The late Lord Kingsland, chairman of the JCRA, said: ‘Although there were instances where competition in a small island might be foolish – for instance in the provision of telecoms infrastructure…’ (source: Jersey Evening Post).
We now have three operators with their own infrastructures and a fourth coming on-line. There must be more to running a community-owned company like JT than only the bottom-line. Think twice buy local – what a joke.