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Thursday, 17 November 2011

"Eliminate competing technologies" - Sure & Airtel

Gigabit Jersey launched a limited trial to residents of Castle Quay early in 2011.

It is absurd for Airtel and Sure to suggest
that we should not have a fibre optic cable network.
Just so they can eliminate competing technologies?
Philip Ozouf  and Freddie Cohen were sold on the idea during a recent visit to Mumbai, India and both were committed to utilising public money to support its introduction to Jersey.

It has become one of the flagship programs of the Jersey government but I am not convinced that it is a wise use of public money.

Jersey Telecoms is a private company which is owned by its shareholders, is run by directors for the exclusive benefit of those shareholders. Now 51% of the shares happen to be owned by the States of Jersey but that does not mean it is a public body by any means, nor that it should be given any special favours by the government.

Jersey Telecoms should be run by the directors, without the interference of government, with the sole duty to ensure the future profitability of the company.

I do not make any value judgement as to whether the investment in a fibre optic network is sound or unsound, I do not have sufficient information, but it seems to me that if this is going to guarantee the future profitability of the company and ensure a return for the shareholders then this is an avenue that the director's should be exploring, without any recourse to the States. No company polls its shareholders on executive decisions.

The directors, if on balance they believe this is the best decision for the future of the company, should be seeking to raise funds from private sources, not public sources. The funding of £40 million should readily be raised given the profitability and assets of the company. Or they should be made to pay commercial rates of interest on the loan from the public.

Sure (Cable & Wireless) and Airtel-Vodaphone are both opposing the deal. There opposition is of course somewhat of an act of self-interest as they would prefer Jersey residents to use mobile technology for internet access.

As both are licensed mobile network operators I cannot see what right they have to prevent Jersey Telecoms from implementing a fibre optic underground network, it would seem patently absurd to rely on only one form of technology. That is an unnatural obstruction to the operation of a free market in one of the most important industrial sectors.

It may be that in the interests of a level playing field the mobile part of Jersey Telecoms business be spun off as a separate entity and not be allowed to cross sell mobile and land-based services. But to deprive Jersey of a fibre optic network and enforce the use of mobile networks would simply be a short-sighted and unfortunate decision.