Is cost really outstripping revenue?
By Randy Howard
IS the actual cost of providing domestic residential fixed line service to Barbadians really more than the revenue that is being generated from the retail price for this service?
This was the question asked by Chris Halsall, Director of Ideas 4 Lease (Barbados), an independent consulting group, at the Fair Trading Commission’s “Educational Forum on the Price Cap Mechanism” held last Tuesday.
During the presentation section of the forum, the Commission stated that the domestic residential fixed line service was set at a fixed 7 percent increase per year so that consumers would be able to know they can expect the expense will be. But during the question and answer section, Halsall asked if the reason might also be “because Cable & Wireless are claiming that the cost of providing the service is currently less than the retail price”.
“So my question to the Commission is, do you know what the actual cost is? As in, how many more years of 7 percent increases are consumers going to suffer before those curves cross?” These curves being representative of the cost of providing the service in relation to the revenue generated from customer use.