Market Studies

On May 14, 2020, the Spectrum Management Authority (“SMA”) requested that the Fair Trading Commission (FTC) conduct an assessment of competition within the Telecommunications sector. The SMA made the request pursuant to its ongoing exercise to determine whether the Aggregate Spectrum Cap Policy (“Cap”), which is currently used as a measure to safeguard competition, should continue. The Cap limits overall spectrum holdings of mobile operators to 120 MHz with respect to the 700 MHz, 850 MHz, 900 MHz, 1800 MHz, 1900 MHz and the 1700/2100 MHz (AWS) bands. In conducting the assessment, the FTC benefitted from information provided by the SMA, the Office of Utilities Regulation (OUR), Digicel Jamaica Ltd (‘Digicel’), and Cable and Wireless Jamaica Limited (‘FLOW’).

The main conclusion of this study is that the mobile telecommunication market is competitive. In the absence of easy conditions of entry, the competition in this market would be highly susceptible to coordinated conduct. The anticipated increased demand for mobile telecommunication services could make it more difficult for future entry to occur if the mobile spectrum is not properly managed. The SMA, with oversight responsibility for the assignment of mobile spectrum, has a singular opportunity to safeguard the competition in the mobile telecommunication sector by striking the appropriate balance between preserving the ease at which entry of a third operator and allowing incumbents to meet the increased demand for mobile telecommunication services.

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Companies listed on the Jamaica Stock Exchange (JSE) are required to submit audited financial statements to the JSE at scheduled intervals. To meet this requirement, companies engage the services of auditing firms. The term “Big 4” has been used to characterize the top four leading auditing firms. Internationally during 2019, Deloitte was the largest auditing firm, followed by PricewaterhouseCoopers then Ernst & Young and KPMG.

Audit services markets are typically highly concentrated. The more concentrated a market is, the greater the opportunity for the auditors to exercise market power individually or by collaborating with each other. To counter this potential harm to their consumers (‘clients’), competition authorities in some jurisdictions monitor the audit services market for signs of coordinated or unilateral conduct.

The study examines auditing services provided to clients listed on the main and junior markets of the JSE during the period 2013-2018. This study provides an overview of the state of competition in the market for auditing services in Jamaica- focusing on trends in market concentration. Further analysis was done at the individual firm level and the industry level to determine industry-specific interactions between the Big 2 and other auditors.

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Loans play an essential role in consumers’ lives as it allows them to consume goods and services that they may not have had been able to afford based on their current disposable income. Loans allow easier access to major expenditures such as real estate and motor vehicles as well as minor expenditures such as furniture or appliances or unexpected life events. In Jamaica, the “partner” system is a longstanding private system that facilitates loans in a small, closed network of individuals. Commercially, consumers of loan products (‘borrowers’) acquire loans in Jamaica from a variety of financial institutions such as microfinance institutions (MFIs), commercial banks, credit unions, and building societies.

The purpose of this paper is to provide borrowers with information on the practices of financial institutions concerning the early repayment of loans. It is hoped that this note will facilitate a more informed decision-making process on the part of borrowers. The paper identifies the stated policy of MFIs, commercial banks, and credit unions as it relates to the early repayment of loans. It is important to shed light on the policy of MFIs as, based on complaints, the expectation of borrowers regarding the early repayment of loans differ from their experience with MFIs. This suggests that there is some degree of information asymmetry in operation.

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Increasing access to credit is arguably the most powerful strategy any government can implement to drastically improve upon the social and economic status of individuals during the span of one generation. Financial Inclusion may be defined as “the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society.”The World Bank affirms that “…financial inclusion is a key enabler to reducing poverty and boosting prosperity.”2In March 2017, the Government of Jamaica articulated its National Financial Inclusion Strategy (NFIS), in support of Vision 2030-National Development Plan.

 A fundamental problem faced by most businesses and individuals is that the resources available at the earlier stages of the life cycle is inadequate to support the level of consumption required to generate the additional resources in the later stages. This problem is solved by financial intermediaries who take funds from individuals and businesses with excess resources and on-lend to consumers who have inadequate resources.

Accordingly, the incidence of financial intermediation is the hallmark of economic and social progress in any economy. The primary objective of the study is to inform the National Financial Inclusion Strategy by assessing the nature and scope of competition in the moneylender market.

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The future is unknown and consequently, risks are inherent. Risks, specifically downside risks, can result in large losses which can deplete the resources of a person. On the other hand, there may be future outcomes which may result in substantial gains (upside risks). Most persons, however, are concerned with the effects of downside risks; insurance is used to lessen the effects of these risks.

Insurance is an agreement in which one party (the policyholder) makes periodic payments called premiums to another party (the insurer) who agrees to pay the policy holder a defined sum (claim payment or benefit) in the event of a specific loss. Specifically, motor vehicle insurance is insurance purchased for cars, trucks, motorcycles and any other motorized road vehicles.  This prevents the policyholder from bearing the total costs of losses arising from damage and/or bodily injury resulting from traffic collisions, theft of the vehicle or other damage caused to the vehicle. Instead, the insurance company offset a significant portion of the costs.

In Jamaica, motor vehicle insurance is offered by general insurance companies which are the underwriters for policies, sales agents, brokers and account executives. As at June 2015, there are 22 insurance agents, 26 insurance brokers and 10 general insurance companies that are licensed to offer motor vehicle insurance.

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The groceries sector makes a significant impact on the welfare of consumers in Jamaica. Intuitively, one would expect the impact to be significant due to (i) the wide cross section of individuals who consume grocery items; (ii) the high fraction consumers’ budget allocated to the sector; and (iii) the high frequency in which many consumers interact with retailers of groceries in Jamaica.

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When it comes to Jamaica’s energy options, the narrative is changing! In December 2014, Nestle Jamaica Limited announced that it would cease local production in January 2015, due to unfavourable energy costs; reducing the price of energy has been an unwavering demand of both residential and commercial consumers alike. There is a noticeable shift, however, in the nature of the discussion surrounding the way out of Jamaica’s energy crisis as short-term policy proposals have now been introduced into the hitherto bag of long-term prescriptions.

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The purpose of this study is to describe the prospects for competition in the credit union sector regarding the provision of ancillary services.  The goal is to promote competition where consumers are provided with better products and services and a wide range of choices at the most affordable prices.

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Expenditure on petroleum continues to be a concern at the global, regional, national and household levels. In this note, we seek to identify some of the crucial factors causing the observed variation in the retail price of petroleum products across dealer locations. We focus specifically on two structural characteristics of retail petroleum markets: (i) the number of competing dealers; and (ii) the extent of controlling influence of marketing companies over dealers.

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This report summarizes the key results of our study into the nature and extent of competition in the commercial banking sector in Jamaica.  The aim of the study is to assess whether any bank or group of banks could be hindering competition; and recommend measures to enhance competition in the sector.  Particular focus is placed on fees charged on ancillary services offered by banks. These services include transactions relating to credit and debit cards, bill payment, wire transfer, manager’s cheque, standing order and chequing accounts.  The study also covers charges relating to minimum balance violation, in-branch withdrawal, cash deposit and dormant account.

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