Guyana moves to end GT&T monopoly

Guyana Chronicle
August 20, 2000

IN THE face of mounting calls for competition in the telephone and telecommunications sector, the Guyana Government is getting substantial help from the Inter-American Development Bank (IDB) for a reform scheme.

The bank is providing US$1.1M for a project to free up the telecommunications and information service sector and officials expect that within two years, there would be competition in all telecommunications services.

When the Atlantic Tele-Network (ATN) firm from the United States Virgin Islands bought 80 per cent shares in the state-owned Guyana Telecommunications Corporation in 1990, it got a 20-year exclusive licence or monopoly for landline communication and other services.

The ATN/Guyana Telephone and Telegraph Company (GT&T) also got a non-exclusive licence for 20 years for wireless communication but the company and the Guyana Government differ on whether GT&T has exclusive rights (monopoly) for international connections, according to officials.

As a precautionary measure, two other cellular operators have been licensed only for local service with the option to interconnect with GT&T for international transmission.

At the signing of the IDB agreement Friday, Prime Minister Sam Hinds, who has responsibility for telecommunications, noted the controversies since the state-owned company was privatised and the calls for transforming the sector.

He said the government tried the "route of negotiations" and by early last year, agreement was reached with GT&T on moving forward.

With GT&T head, Ms Sonita Jagan at the ceremony, Mr Hinds said the government expected "tough but cordial negotiations" with the monopoly firm "for the early resolution of a number of controversies and the transformation of Guyana's telecoms sector."

GT&T has been negotiating in good faith and has supported the administration's steps to get technical and other help for an "open competitive regime", he said.

IDB Representative in Guyana, Mr Robert Kestell signed the agreement for the bank at the ceremony in the Prime Minister's Office in Georgetown.

At the signing, Mr Hinds said the scheme "will be one of the most important reform projects for our country."

He said that in these times when many of the fastest growing economic sectors involve utilisation of telecommunications, Information Technology and computers, Guyana needs to, and wants to find a place alongside the new economies.

Recalling that President Bharatt Jagdeo had spoken a number of times about promoting such developments in Guyana he conceded that, with the signing of this technical assistance agreement, Guyana was now taking a big step in that direction.

In keeping with the strategy for the modernisation of the telecommunications sector, the project will provide the Government of Guyana with the experience and expertise to undertake the reform of the telecommunication sector.

The Multilateral Investment Fund of the IDB will provide resources to hire international consultants with expertise in telecommunications reform to help formulate a strategy.

On completion of the strategy, the consultants will assist the government in its implementation, the Prime Minister explained.

And noting tremendous, and even revolutionary changes in many sectors, he emphasised that there has been need for reform to bring arrangements in line with the new order.

"New technology has propelled the rapid, if not abrupt change from monopoly in the telecoms sector, to a freely competitive market regime," he stressed.

The Prime Minister said the project comprises five components:

** Formulation of a strategy for modernisation of the sector. ** Reform of the legal/regulatory framework. ** Development of a network cost model and audit of the GT&T. ** Carrying out outreach/training activities. ** Technical support of the principal regulatory agency - the Public Utilities Commission.

He pointed out that each component is essential to the fulfillment of the project, stressing that the fourth component is particularly meaningful for the government, as it accords with its general discipline of adherence to transparency and consultation.

Under this component, the Prime Minister said, consumers, civil society, operators, investors and all other players in the sector will be educated in the issues involved in the reform.

"I expect that there will be much information sharing, information gathering and consultation among consultants, specialists and others involved in the project, and all of the players in the sector, including the public at large."

"This is an exciting project for all of us," he said, adding that the anticipated possibilities and positive outcomes can only ensure "our collective benefit."

A background document says the financial audit of GT&T is to get data that would help fix the basis for rates to final users and for interconnection charges to other operations.

The Prime Minister cited some of the benefits of the project as: ** business development opportunities for private sector interests in telecommunication, information technology and e-commerce. ** Full competition in the sector within the next two years. ** An upsurge of investment in the sector. ** A regulatory framework that facilitates the introduction of competition in accordance with transparent and non-discriminatory rules with attendant benefits of a liberalised sector - wider coverage, cost based pricing, better service.

He said it is anticipated that Guyana will see the development of call centres to electronically deliver services such as transfer services, financial and professional services, as well as to transact trade and commerce.

"We in Guyana have not been escaping this call for change: in fact many persons have been saying that we have been lagging - nearly all our fellow CARICOM (Caribbean Community) countries are at various points along this process of reform of the telecoms sector," he said.

Mr William (Bill) Garrison was selected from among seven applicants for the position of Senior Telecommunications Advisor, and the Government of Guyana hopes to conclude a contract with him within the next two weeks, he announced.

The Prime Minister is optimistic that Guyana would start participating in the new economic activities, even ahead of the completion of the reform of the telecoms sector.

He said that ATN has announced plans to establish an off-shore USA call centre, and that already, there have been a number of enquiries for similar ventures.

Meanwhile, with the Americas 11 cable available, GT&T has said it can offer high capacity connections at prices which could not be easily bettered, if at all, the Prime Minister said.

Kestell congratulated the government saying that he thinks that all of the areas mentioned in the agreement are much needed and very important.

He said he looks forward to working closely with the Government of Guyana.

The project is also expected to see at least three cellular companies operating here.

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