May 24, 2018 News
The Government is preparing for high-level talks with US-controlled Guyana Telephone and Telegraph Company (GTT) early next month on liberalization of the sector.
The talks will take place at a time when the rest of th
e world has moved towards auctioning of lucrative telecoms spectrums to get value for money.
Minister of Foreign Affairs, Carl Greenidge, was identified to lead Guyana’s team into the high-level talks with the company. When questioned by Kaieteur News yesterday about auctioning of the spectrum, Greenidge did not commit Government to undertaking this now popular approach.
He pointed out that the issue of the spectrum and the allocation was raised at the level of the joint Parliamentary Select Committee on Telecommunication in 2014 and 2015.
“Amongst the things that were considered was an auction and it was also recognised that it wasn’t perfect in all circumstances, and there may be the need to try and utilize that mechanism in limited or special circumstances to begin with, to be sure that it is appropriate,” Greenidge stated.
He explained that Minister of Public Telecommunications, Catherine Hughes, will have something to say on the spectrum allocation at a later stage.
Asked about the ongoing negotiations, Greenidge stated that his own engagement in terms of meeting with GTT has not yet started.
“The engagements proceed at a technical level. They break, they come back again. I would expect early in the new month we will re-engage at the highest level,” Greenidge stated.
GTT is said to be using spectrum allocation as a bargaining chip in the ongoing liberalization talks.
Government is said to be awaiting a proposal from GTT, which has requested that spectrum allocation be included as part of a liberalization deal.
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 as to which companies to give out those spectrums to, making it an expensive bargaining chip on the negotiation table.
Spectrum auction is 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 their spectrum. These include Canada, Germany, India, Ireland, Pakistan, the United Kingdom and 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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