THE LEGAL TRIALS AND TRIBULATIONS OF THE ISLAND'S VoIP PIONEERS

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It was in December 2003 that the Mauritius' Yiptong-family started offering VoIP services under the brand name of "WorldCard" (www.mauritel.net). The Yiptongs had obtained an ISP license and thought this to be sufficient as VoIP is an IP service after all and special VoIP licenses were not available. The regulator thought otherwise, Kenneth Yiptong even ended up in jail for a short period. Today, the courts still have not decided who's right. Kenneth Yiptong doesn't really care. He now has a VoIP license and enough other problems. "We get harassed every day", he told Daniel AJ Sokolov (www.mediaclinic.de), "For example with unfounded disconnection threats by the incumbent. And the regulator is basically useless. He is not protecting us."

According to Yiptong, "the regulator's job is to protect new entrants from the incumbent". However, the problems hindering competition and thus the development of the market are obvious. Mauritius is one of the crazy markets were fixed line interconnection fees are higher than the incumbent's tariffs for end users and even higher than mobile termination fees. If Yiptong wants to transmit a call from a MT (the incumbent) customer, he has to pay an origination fee of MR2.50 a minute.

This fee breaks down as follows: MR1 goes directly to MT, MR1.50 to a Universal Services Fund, much of which goes back to MT as well. Local termination costs another MR1.50 to MT or MR0.90 to a mobile phone. A local call for the MT customer, including origination, transition, termination, billing, customer services, bad debt, marketing, tax, etc. costs less than MR1 MR/min. (The monthly service fee for the line is MR90.)

"In telecommunications in Mauritius today there is no more margin. Even in VoIP we are loosing money", concludes Yiptong, who accuses the incumbent of price squeezing. "Small operators like us will die in this business, only MT and cellular operators will survive if the regulation doesn't change." From his point of view, the current lack of regulatory action will also kill the new WiMAX-service Nomad offered by Network Plus, "unless the regulator starts regulating."

One episode that really gets Ken Yiptong going is the dispute over fees collected by MT from Yiptong's customers. From the beginning of the VoIP service in December 2003, Yiptong's customers used a toll free access number. When MT started a rival VoIP service in April 2004, it suddenly billed all its fixed line customers for all calls to the Yiptong's toll free number - back to the very first day. Yiptong's customers, of course, were outraged, and so is Kenneth Yiptong: "It took the regulator ten months to decide that that is illegal. And until today, MT has not refunded the customers." He estimates the illegally collected amount to be somewhere in the mid six digit range. Also the regulator’s ruling only applied from the date of its ruling.

The Yiptongs are a powerful business family in Mauritius, importing gas and consumer goods to the island. They run a paging network in the UHF band, covering the whole island with just seven base stations. (For a mobile phone network you'd need at least 150.) Plus they are importing Motorola mobile phones to Mauritius, Madagascar, the Seychelles and Reunion. Telecom wise, they're currently fighting four legal battles: One is to lower interconnection fees, the second concerns alleged discrimination by the incumbent, the third is about the VoIP license issue and the fourth is a criminal court case -a result of the pioneer VoIP business.

But according to ICTA's executive Directory, Krishna M. Oolun: "There is a lack of experience with some new operators. They did not consult the regulator before signing contracts with the incumbent. So they ended up with bad contracts", said Oolun who has come into office at the beginning of this year.

Regarding the accusations by Ken Yiptong of being inactive, Oolung explained: "There is a clause in the contracts between Yiptong and (the incumbent) MT about conflict resolution, which does exclude the regulator. So the regulator can't go in." In general, court proceedings were a normal thing in the industry, not a sign of lack of regulation. "We need to stabilize the market and make sure, that new entrants are able to provide good quality service and remain in the market", Oolun stated.

Asked about the high origination fees paid by the Yiptongs Oolun admitted "There is some amount of cross subsidization". According to ICTA (www.icta.mu) calculations, the monthly cost of a normal single telephone line is MR257 but MT is forced to charge MR90 only. (There are some 360.000 lines in operation.) The difference is refinanced by interconnection fees collected from international long distance operators, who pay MR2.50 instead of the usual MR0.53.

Another charge laid against the regulator by the Mauritian industry was the lifting of an ICTA ruling regarding international long distance tariffs. "We are happy, that the tribunal lifted our ruling", says Oolun. A flaw in the law regarding ILD made it illegal to charge less than the incumbent, thus making any sense of competition impossible to achieve. "As regulator, we can only do what the law allows us to do." So the ICTA had to issue a ruling it itself regarded as bad.

Oolun would like to further open the market. Soon, the requirement of pre-approval of all operator's tariffs should be lifted. Only tariffs by operators with special market power would need pre-approval in the future. "At some point in time" there should also be a totally new licensing scheme. Oolung sees a "transition to only licensing frequencies and numbers, but not services."

"We've gone quite a long way, made some mistakes, but also a few good things", Oolun concludes, "We will keep on learning so that we can ensure and sustain an environment for the development of the ICT sector."