Dec 19, 2008 Features / Columnists
Peter R. Ramsaroop, MBA
Telecoms Issue 1: VOIP
Guyana’s political framework as it relates to telecommunications industries is fully mercantilist and monopolistic and as a result stifles growth.
Recently GRA announced that they will soon go after internet cafes and internet calls with the goal to shut them down. I have a question to ask the legal fraternity out there.
Is it legal for the GRA to go after internet cafes based on VOIP (Voice Over Internet Protocol) and not taxes? This issue of VOIP has been with us for some time now, and it is time the reality of this technology be addressed.
The issue as it relates to blocking VOIP by most telecommunication companies has to do with revenue. One company may feel that after investing in infrastructure they are entitled to be the sole entity delivering voice communication to the society, and their infrastructure should be the conduit on which that service should be executed.
With the advent of VOIP, if an end user has a connection to the internet, he can make that call using any VOIP services cutting out the local telecommunication infrastructure if he so chooses to do.
Around the world, people have VOIP phones like Vonage that has nothing to do with their local telephone company.
Intro to VOIP In Guyana
The problem with VOIP, as it relates to Guyana, is that GT&T via their contractual agreement supposedly has a monopoly on all calls entering and leaving Guyana. For years people have complained that these calls have been expensive to the consumers.
When VOIP first made its advent in the US, people were making telephone calls all over the world, including Guyana, for free. After a while there were some restrictions, but people were still using Yahoo and other Internet-based messenger services that were offering their users five minutes at a time free.
It was a free for all then, though the service was bad. Eventually it turned to a paid service, with mostly people using DIALPAD and NET2PHONE, which were far cheaper than the local phone company.
With the bursting of this new technology, savvy technical and entrepreneurial people in Guyana realized that they can offer that service to the USA and make a profit, since many Guyanese have relatives there and so the internet cafe industry was born in Guyana.
At first GT&T allowed this practice and cafes were established and served a good purpose to the people in the communities they were operating in. For the first time folks were introduced to a computer and the internet via these “moms and pops” technology companies. The fight began with the “Termination Revolution” coming to Guyana.
This, also known as voice termination, refers to the handing off or routing of telephone calls from one telephone company, also known as a carrier or provider, to another.
For us that simply means that with the advent of Internet, technically savvy entrepreneurs began routing calls to Guyana, bypassing our local telephone company infrastructure.
The service offered is far cheaper than what we pay currently for international calls. In this operation, “terminators” as they are known, would use the internet to route calls to their SIM banks from overseas, and allow that GSM service to make the call.
Recently, a huge US-based Telephone Company was offering 250 minutes free to Guyana every month to its customer base in New York City where there is a concentration of Guyanese.
I managed to use this service once and got a Digicel recording telling me the phone does not have enough credit to make this call.
The local telephone company fight is not really with the internet cafes; it has everything to do with call termination with the claim that call termination is biting a huge hole into their revenue base. This should have nothing to do with internet cafes.
NEED FOR DIALOGUE AND NEW POLICIES
There is a great need for proper telecommunications policies, which are sensible and good for the average Guyanese. Internet cafes are good for Guyana.
They spawn a whole new culture of computer literate people in our society and causing them to close down via a witch hunt is unproductive and backwards.
For this reason, we should work together towards breaking that monopoly and allow other telecommunication entities to originate and terminate calls to and out of Guyana. In addition, GRA needs to address a tax solution, not to support that these entities must be shut down.
With the growth of wireless technology, land lines have become useless and the start up costs for a telecommunications firm is very cheap. What will happen if the telecommunications sector is liberalized?
The answer is simple: all of Guyana will be connected via cell phones and wireless internet because new competitors will enter the sector and readily capitalize on opportunities, whether these opportunities are in Lethem, Kurupung, Orealla or Moruca.
There is a great need for a dedicated Ministry to Science and Technology. If we miss this technology super highway, she will forever be behind.
For example, Liberia, which just came out of a civil war, has four cell phone providers and 10 radio stations, and yet Guyana’s economy with all its advantages is not liberalized.
Fair competition breeds lower prices, as such the local telephone company since the internet boom has been forced to be competitive solely because of these new comers.
We cannot allow the lack of a sound technology approach and correct tax laws to stifle these new comers. If so, we will take a step back in technology and quality will suffer as a result.
Additionally, unemployment will rise as a result of internet cafes closing and we need all the jobs in our nation as we can.
We know there are discussions to end the long distance monopoly by GT&T and it is our hope that the internet café providers be allowed to ply their trade via call origination and other entities be allowed a slice of the termination as well, not only new players like Digicel. Until next time “Roop”.
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