Telecoms liberalisation talks… Govt. under pressure to auction frequencies

May 15, 2018 News

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Disclosures that US-controlled Guyana Telephone and Telegraph Company (GTT) is using spectrum as a bargaining chip in the ongoing telecoms liberalization talks is creating unease.
A senior Government official is urging serious considerations now for the auctioning of spectrum for the industry.
He said that it will be a perfect opportunity for Government to show that it is serious about getting the best deal for Guyana.
Currently, the two licensed players are GTT and Digicel.
With internet and host of other services rapidly growing in demand, there has been growing urgency at the same time for other companies to enter the market.
The problem is that GTT has since the early 90s, on paper, the monopoly on landlines and international calls.
Government has to engage that company before other investors are allowed in.
With landlines the cheapest and most stable way for internet connectivity, the industry has been virtually stalled while awaiting the telecoms liberalization talks.
In fact, Digicel has made it clear that it wants to land its own submarine cable, which would bring down bandwidth prices and improve quality.
Currently, GTT is facing pressure to improve its internet quality. It moved from dial-up to DSL, branding the latter as ‘Emagine’.
However, that service seemed to have been giving trouble with ‘Blaze’ now being introduced.
Thousands of persons are still paying almost the same price for slower ‘Emagine’ as the new kid on the block, the faster ‘Blaze’.
In September last year, GTT was ordered by the regulator, the Public Utilities Commission (PUC), to roll out 350 new landlines every quarter after a seeming slowdown in investments in this area by the company.
Several new housing schemes have been complaining bitterly of being without landlines despite waiting for years.
Guyana, in July 2016, passed critical new telecoms legislation, paving the way for the Coalition Government to end the GTT monopoly.
Government had tagged a mid-year deadline in 2017 to end that monopoly.
That deadline has been pushed back time and again. It appears that liberalization now would not happen until 2020.
On Friday, Minister of Public Telecommunications, Catherine Hughes, said that the ‘talks are progressing’ and will be concluded before 2020, the year when the next general election is constitutionally due.
Last Friday marked three years since the Coalition Government was elected on campaign promises that included the liberalization of the telecommunications sector.
The talks between the Ministry and the Guyana Revenue Authority and GTT have been centering tax matters.
Now it seems that GTT is insisting that it wants to secure a spectrum deal before the talks conclude. Government is awaiting an official proposal from the telephone company for consideration.
Negotiations with GTT started in December 2016.
Government was mindful of the implications that would result from giving special treatment to GTT. In fact, Hughes had indicated that any concession granted to GTT will be offered to all operators in the sector.
Several countries have been going the route of auctioning the spectrums for telecoms companies.
The reason for this is that there are limited frequencies available in each country.
Governments are therefore under pressure which companies to give out those spectrums, making it an expensive bargaining chip on the negotiation table.
Spectrum auction is said to be a process where a government uses an auction system to sell the rights (licences) to transmit signals over specific bands of the electromagnetic spectrum and to assign scarce spectrum resources.
Rather than rely on Government to assess the merits of competing firms’ business plans, an auction forces telecoms companies to put their “money where their mouths are” when they make their bids.
An auction is more transparent, and gives rise to less political controversy when compared to other allocation mechanisms, since there is no room for subjectivity in assessing whether an undertaking accomplishes criteria for allocation.
Several countries have gone the way of auctions for its spectrums.
These include Canada, Germany, India, Ireland, Pakistan, the United Kingdom and of course, the United States of America.
Auctions usually raise important sums of money provided there is competition among many bidders.
With a hot debate now ongoing over how Guyana is negotiating with investors, especially against criticisms over the ExxonMobil contract, the liberalization talks are expected to take front stage.
In the meantime, the two companies, both GTT and Digicel, have been cashing in on the market, with millions of dollars being transferred ever so often to pay the parent companies and others.

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