Legislations tabling today to squash GT&T’s monopoly

Aug 04, 2011 News

Major shake-up in telecoms industry…

By Leonard Gildarie
In what will be one of the most significant shake-up to the industry over the last two decades, Government is to table legislation today that will break the telephone monopoly of the Guyana Telephone and Telegraph Company (GT&T), effectively throwing the market wide open for other companies to come in.

Cabinet Secretary, Dr. Roger Luncheon

It is a Bill that Government will be burning the midnight oil and with Parliamentarians expected to work through the recess to ensure the Telecommunications Amendment Bill 2011 and a number of others including the Access To Information Bill 2011 are passed before Parliament goes into recess and eventually dissolved to facilitate the hosting of the General Elections later this year.
GT&T is the only company licensed to install and operate landlines. All international calls have to be routed through that company. It will mean that other telecommunication companies could also ask for licences to operate landline services, a key requirement for DSL’s internet connection which Government is hoping to use to push connectivity in their One Laptop Per Family project.
There have been complaints overtime about sloth of expansion by GT&T into unserved areas, including several new housing schemes.
Digicel, a mobile company which has spread its wings in several regional territories, has entered the mobile market gaining significant grounds but still has to route its international calls through GT&T.
End of an era

According to Government spokesman, Dr. Roger Luncheon, during his weekly post-Cabinet briefing yesterday, legislation when enacted will mean that the current terms and conditions of the agreement signed 20 years ago with the former People’s National Congress administration will no longer exist.
The legislation is one of the pledges made to the people of Guyana to open the sector to more competition and the current “terms and conditions (of the GT&T agreement) will no longer be in existence,” Luncheon said.
Kaieteur News could not immediately make contact with GT&T’s Chief Executive Officer, Yog Mahadeo, yesterday for a comment.
Government has been moving to sell off its 20 per cent share in GT&T which has been earning between $200M and $800M annually.
Last year GT&T announced that it was invoking the clause that allows it to maintain its monopoly. The first 20 years ended in January.

Auto renewal?
According to outgoing Chief Executive Officer, Major General (rtd), Joe Singh shortly before his retirement at the end of July last year, already the company has applied for its licence to be renewed for a further 20 years.
The renewal application is a formality, he said.
At the end of the 1980s, the Guyana Government decided to privatise telecommunications as part of its broader reform programme.
In 1990, US-based Atlantic TeleNetwork acquired 80 percent of the telephone company and the Government retained 20 per cent. GT&T commenced operations on January 28, 1991.
In December last year, Mahadeo had express concerns over the proposed legislation saying that it does not reflect the challenges of Guyana.
“We are neither averse to, nor afraid of competition…But the rules must be fair and applied evenhandedly, regulation must be sensible and enlightened, regulators and policymakers must not be allowed to pick the winners, and sector policies must encourage rather than deter investment in the rollout of networks and services,” Mahadeo told a gathering of media operatives.
Mahadeo had indicated that the draft legislation and regulations were shared with the company for their input in November.
He explained that their comments were submitted with the caveat they were allowed insufficient time to study and respond to the “voluminous documents”.
“In our opinion, the proposed law and regulations do not reflect an understanding of the challenges of Guyana and/or the telecommunication sector as a whole. In the new dispensation there will be multiple service providers.”

GT&T unhappy
He said that having studied the document, “we are left with numerous concerns – concerns which, if not clarified, will create investor and consumer uncertainty: for example, would it not amount to a rewarding of illegality if a currently illegal operator is automatically granted a licence with the introduction of the new legislation?”
He said that there are also concerns, in that it appears that the absence of stern penalties for bypass in the proposed legislation and regulations may suggest that there is a belief that this illegal activity will disappear with the introduction of greater competition.
“Similarly we are concerned that newcomers may or may not be required to comply with the same set of rules as we have had to.”
He cited as examples interception, spectral fees, licence fees, VAT collection and remittance, among others.
“It is also our concern that newcomers will hide under the covers of VOIP (Voice over Internet Protocol) to cover a massive voice network while not being regulated for same and we have already seen public advertisements which have apparently deluded the authorities.”
Mahadeo stressed that GT&T does recognise that with the implementation of the new legislation and regulations, there will be challenges for the company.
He pointed out that with the introduction of the new legislation, significant reductions in both international settlement rates and the volume of GT&T’s international traffic are anticipated.
“This does not necessarily translate to any savings being passed on to the consumers.”
He said too that they expect that there will be increased local and data services competition from operators who are not required to make their own investment, but can be allowed to “free-ride on others”.
He spoke too of an expected increased regulatory scrutiny of components of GT&T’s business, which are presumed to be dominant, as well as increased costs to facilitate additional regulatory impositions.
Mahadeo said that GT&T has grown working fixed line services more than ten-fold, from 13,000 to 149,000 lines, even as it has modernised the network technology.
“Thus, despite Guyana’s relatively low per capita income, our tele-density is currently around 20 percent…This means that the people of Guyana have greater access to fixed line telephone services than people in higher income countries such as Saudi Arabia, Egypt, Jamaica, Suriname, and the Dominican Republic, to name a few.”
Meanwhile, in addition to the Telecommunications Bill, the National Assembly will be working through the recess to ensure that the Access To Information Bill 2011 is passed also. There has been a clamouring for this legislation, which forces government to provide information on projects and policies.