Jordan's telecom regulator fails its "level playing field" test

The latest research note by Arab Advisors Group explains why the step by a car parking company to use payphone cards from one operator over the other is a serious breach of the payphone licenses

July 4, 2001 -

A new Research Note released by Arab Advisors Group (www.arabadvisors.com) a specialized strategic research company focusing on telecommunication, Internet, and technology in the Arab world, explains why the decision taken by Auto Park (a new car parking management company in Jordan) to exclusively use ALO's payphone smart cards over JPP's cards is considered a serious violation of the payphone licenses.

The Arab Advisors Group points out in its Research Note that ALO cards have become a separate revenue stream from car parking operations and not payphone operations, keeping in mind the fact that one operator has been chosen over the other.

"JPP's take on this matter is that of a hard luck situation. JPP has not contacted the Telecommunications Regulatory Commission (TRC) and has no intention to do so", wrote Sarah Alalul, an Arab Advisors Group analyst. "Such an attitude is damaging and could threaten the very viability of the JPP payphone operations." Sarah added. The fact that the TRC has not opposed the ALO and Auto Park agreement casts serious doubts on the Jordanian regulator's ability to insure just competition in the Jordanian communications market.

The Arab Advisors Group pointed this example out as a case of opaque cross subsidization. ALO's payphone operations should not be cross subsidized by the Auto Park Company and car parking fees, just as Jordan Telecom has an obligation not to cross subsidize its fully owned subsidiaries, Mobilecom and Global One.

According to the Research Note, ALO Will start generating revenues from people who may never have used an ALO payphone before. People will in effect be forced to ALO payphone cards to park their cars. Arab Advisors analyst, Sarah Alalul, highlights the significance of this point with the fact that payphone cards have expiry dates.

The Research Note suggests five remedial actions for an easily rectifiable situation. "Unless the current situation is revised, this state of affairs looks set to cause problems for all" Sarah explained. The suggested steps include obliging ALO and Auto Park to disclose the agreement between them and extending the agreement to JPP's payphone cards as well.