The regulator wants retail customers to start seeing the benefit of wholesale price reductions introduced nearly two years ago.
The Guernsey Competition and Regulatory Authority said those reductions should be delivering savings to retail customers of about £19m. over a five-year period, whereas basic fibre broadband prices had actually gone up.
It has warned the telecoms companies they would face regulatory action unless they started passing savings onto retail customers soon.
‘The market trajectory appears to be that most customers in Guernsey have been given the option of upgrades to higher-speed products but not the benefit of lower prices,’ said the GCRA.
‘The authority is particularly concerned that broadband retail prices in Guernsey might not be sufficiently competitive, given there is little evidence that the savings to retailers are being passed on to consumers, despite the wholesale market being regulated at cost, and retailer input costs falling significantly as a consequence of regulatory intervention.’
The wholesale price of broadband was cut by 31% in April 2024, but local customers are still paying more than they should be, the regulator said.
Sure’s entry-level broadband price in Jersey is £30 a month for up to 100Mbps but in Guernsey the charge is £48 a month for a 75Mbps connection.
However, the GCRA has stopped short of recommending retail price controls for the time being.
It still hoped that the wholesale price controls introduced in 2024 would prove adequate.
It said it planned to focus on ‘proportionate interventions’ in the retail broadband market which were likely to deliver benefits to customers.
If its warnings about price are not heeded, it may require telecoms firms to submit regulatory accounts for their retail broadband activities.
The authority said it was also considering looking at how retail broadband is marketed and contracted and at quality of service guarantees.
It said that it was ‘explicitly expecting’ improved retail offers and better value for customers in the medium term.
‘Should evidence indicate that retail consumers are not receiving a fair share of the benefits, the authority may revisit its approach and introduce further appropriate and proportionate remedies,’ it said.
The authority’s report concluded with a ‘proposed decision’ that Sure has a dominant position in the island’s retail broadband market.
It will make a final decision following further consultation and provided no indication as to when that might be.
A Sure spokeswoman said it had received the GCRA’s proposed decision.
‘We will be considering it fully so we can respond to the GCRA by the stated deadline of 9 March,’ she said.