JT fined £40,000 for ‘margin squeeze’

JT fined £40,000 for ‘margin squeeze’

As well as selling broadband packages direct to consumers, JT is the sole supplier of wholesale fixed-line broadband to other telecoms companies.

The JCRA found that the price the firm charged other companies for wholesale services was so high it would effectively force them to set their retail prices above JT’s in order to compete.

This practice is known as a ‘margin squeeze’.

The JCRA found that the company, which has about 60% of Jersey’s retail broadband market, had engaged in margin squeeze in the 13 months up to February.

In its report into the breach, the JCRA said JT had ‘taken steps to undo the contravention by raising retail prices to a level which removes the margin squeeze’.

It continued: ‘While it took some time to take this action, JT did co-operate with the investigation in a reasonable manner.’

Tim Ringsdore, interim chief executive of the JCRA, said: ‘This was a breach of JT’s licence conditions and it is not the first time JT has been warned of engaging in margin squeeze.

‘We consider the level of penalty to be appropriate. It is essential, for the maintenance of a healthy and competitive economy and to protect consumer choice and value, that activity of this nature is penalised.

‘JT has accepted it breached its licence condition and has subsequently cooperated with the authority in our investigation, and we have taken that into account in arriving at our conclusions.’

In a statement, JT said that the JCRA’s decision came ‘as a disappointment’ but that it fully accepted the watchdog’s conclusions.

The company added: ‘Our discussion with JCRA over the financial model used to regulate this market goes back over a number of years, and we hope it can be developed further in the future.

‘Notwithstanding that, this particular issue comes from a genuine error on our part, and we have written to the group of customers involved to explain the situation to them. We will now be working with JCRA to ensure our processes are reviewed, to prevent any repeat.’

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