IDB approves telecommunications reform project

by Gitanjali Singh
Stabroek News
August 13, 2000

The Inter-American Development Bank has given the green light to a technical assistance project to guide the modernisation of Guyana's telecommunications and information services sector.

Prime Minister Sam Hinds on Friday welcomed the approval and indicated that next Wednesday he would formally sign the agreement with the private sector arm of the IDB, the Multilateral Investment Fund.

Under the US$1.5M project, various experts will be provided to the Prime Ministers' office and cabinet to beef up the government's skills to modernise the sector as well as renegotiate aspects of the phone company's contract. The project is to run over 30 months.

The project paper which Stabroek News obtained in June had indicated that GT&T's licence would have to be renegotiated in the government's bid to modernise and promote competition in the telecommunications and information services sector.

GT&T's new Chief Executive, Sonita Jagan has been on record as saying that the company is quite willing to give up its monopoly in the interest of the future of telecommunications and information services in Guyana. However, she feels that all the players have to sit round the table first and decide where Guyana ought to be and then map out a strategy to get there. She was critical of the approach of the MIF providing assistance to the government to determine a strategy for the modernisation of the sector.

But consumer advocate, Sheila Holder, believed that the government was on the right track and argued that the weak (the government and consumer groups) could not sit as equals at a table with the powerful (GT&T).

The technical assistance project has five basic components: determining a strategy for the modernisation of the sector; the legal and regulatory framework reforms; network modelling and audit of GT&T; outreach and training; and strengthening of the regulatory agencies.

A cabinet subcommittee has already been named to determine a strategy and is expected to be responsible for articulating a vision to develop the sector; formulate draft guidelines for the establishment of a pro-competition legal/regulatory framework; and define a negotiating strategy with Atlantic Tele Network, the parent company of GT&T.

Technical assistance is expected to provide for a group of lawyers and telecommunications specialists to assist this subcommittee in formulating a vision and strategy for the sector. International consultants will be hired to formulate the reform strategy and to help the government in its implementation.

The second component of the strategy will cost the most - the legal and regulatory framework. This is expected to see a legal determination of the scope of the purchase agreement and licence of GT&T to determine which areas of the telecommunications sector could be opened to competition immediately.

It will also cover preparation of licences, including model licences for systems and services not now provided. A review of the interconnection arrangements and the preparation of proposals for the issue of the necessary regulations are also to be done.

The grant will also finance lawyers and a telecommunications specialist to support Hinds' office and the cabinet subcommittee in drafting a new regulatory framework and negotiating a new licence with GT&T.

There is to be an audit of GT&T's operation to indicate the actual costs incurred by the company which would serve as the basis for establishing cost-oriented rates, because of the difficulty in determining the cost basis for rates to final users and for interconnection charges to other carriers. Network modelling is also expected.

An outreach programme on familiarising the public on the components of the reform will also be undertaken and a long term adviser to the Public Utilities Commission funded.

Cabinet is expected to approve the strategy to reform the telecommunications sector within four months of the IDB approval and a new licence for GT&T is expected to be in place in 14 months.

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