Caribbean firm to venture US$21M in telecoms sector
Internet capable cellular service proposed
September 26, 2000
A cellular phone company has submitted a proposal to set up an internet capable service here, but this is predicated by the government's commitment to creating competition in the international calls market.
Cel Star Caribbean, a subsidiary of a German venture capital firm HL Global Ventures Ltd, is prepared to invest some US$21 million to set up a 900 mhz GSM cellular network, initially for local traffic. Director of Governmental Affairs for Cel Star Caribbean, Brian Wesley Kirton, said the company, while aware of the present constraints of the market place caused by the Guyana Telephone and Telegraph Company Ltd (GT&T), hoped the government could amicably resolve these constraints thus opening up competition in the lucrative international calls market. He said the proposed local cellular system would provide the platform for an international gateway using fibre optic cable or satellites to access Cel Star Caribbean's hub in Miami. International calls would ultimately be Cel Star's goal to viability, Kirton said.
Prime Minister Sam Hinds accepted the proposal for the government, saying there was nothing in the GT&T agreement with the government to stop it from granting a licence to Cel Star to provide local service. He appreciated that Cel Star was ultimately looking for an international gateway and said it was reasonable to expect that for the company to go ahead with this investment some commitment to a time frame on the international gateway would need to be made. As it was, the government was committed to opening up the whole telecommunications market within two years.
He said a typical consideration process for a licence would take around six months and Kirton said the company could be fully operational within 12 to 14 months of a licence being granted. GT&T currently holds a monopoly on long distance calls but had recently indicated a willingness to discuss opening up aspects of its monopoly arrangements.
The government is pushing for competition in the telecommunications sector as it realises its importance in delivering access to the technological frontiers of e-commerce and the internet.
Cel Star, in a press release, stated that the 900 mhz system which it was employing in the Bahamas and the Dominican Republic was designed to be upgraded for the future integration of high speed data services and would allow Guyana to take full advantage of the opportunities which modern technology presented in the area of wireless voice and data transmission, cellular telephony and e-commerce.
The company is proposing to provide internet services via the cellular network and wireless local loop. The release also noted the importance of GT&T providing efficient interconnectivity between its cellular and land line systems and Cel Star's proposed system. "Cel Star's financial projections take into account internationally defined prices for such interconnectivity," the release said.
Hinds also raised the issue of GT&T keeping its cellular and land line operations "at arms length" so as to allow fair competition in the cellular market. Some observers have noted that the increase GT&T was asking the Public Utilities Commission (PUC) for in land line service might be used to subsidize its cellular business, thus driving out competition. At present only one other company, Caribbean Telecommunications Ltd (CTL) operates a limited cellular service in Berbice.
Phase one of Cel Star's proposal envisages approximately 27 cell sites put into service upon launch, seven to nine months after a licence is awarded. Phase two, in 14 to 16 months would see an additional 35 cell sites.
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