In the face of sharply lower revenues from calls from the US, the telephone company is seeking to raise an additional $5.5 billion from adjusted rates and services to realise its 15% guaranteed rate of return. The December 31 tariff filing, if approved by the Public Utilities Commission (PUC), will see domestic rates rising by 1900% within exchanges and between exchanges by as much as 75%.
The cost of calls within exchanges is proposed to move from 20 cents per minute during the day to four dollars per minute during the day and from 10 cents at night to $2 per minute.
Out-of-exchange calls show an average rate increase of 75%. For example, a call from the city to New Amsterdam now costing $6.60 per minute is proposed to rise to $11.55 per minute during the day and from $4.42 at nights to $7.74 per minute at nights. The company expects to gross $1.6 billion from local rates with the increases if approved.
The company proposes that rates to the United States of America and the United Kingdom be reduced and that one standard rate should apply to both locations i.e. G$136 per minute during peak hours and $123 during off-peak hours. The rates to other countries will remain unchanged except for the scrapping of the second off-peak period for all countries.
The current peak rate to the United States is $167.07 per minute with the first off-peak rate set at $116.95 and the second at $100.24 per minute. This is an 18% reduction on the peak rate and a 4.9% increase on the (first) off-peak rate.
In the case of the United Kingdom, the proposal is for a 27% reduction on the current peak rate of $187.58 per minute and a 6.5% reduction on the first off-peak rate of $131.31 per minute.
GT&T is hoping that the rate reduction on the two main traffic locations will allow for a lowering of the impact of the Voice Over Internet Protocol (VOIP) (internet phone calls) on its revenue intake. The company is also asking the PUC in its application, which is expected to be heard on Wednesday, for all of the international rates to be rounded to the nearest dollar.
In the case of Internet services, the company proposes that the intra exchange rates proposed should apply. Internet subscribers do not pay any charges to GT&T for use of its line service and the firm said this had been agreed in consultation with the PUC to allow for a growth of the Internet. However, the firm now says that 16 million minutes are used monthly, accounting for just under 30% of wireline domestic usage and this situation cannot continue. The firm also found that persons are using this medium to facilitate VOIP for a fee, thereby affecting the company's revenue base and also reducing the tax payable to the government.
The firm has excluded cellular rates from the rate filing in keeping with the commission's request and the recognition that it is a competitive service and should not be part of GT&T's normal operations. GT&T is also seeking relief in a range of other services.
In the case of local services, the charge for a residential main line is proposed to increase from $250 monthly to $1,500 and the cost of each additional service goes up as well. The business rental fee is projected to jump from $1,000 for the first four lines to $3,000 monthly. Charges for every other service such as call waiting; caller identification and other features are also proposed to go up.
The firm's monopoly on customer premises equipment ended last January and GT&T has informed the PUC that it is not opposed to small businesses wishing to service this area. GT&T proposes to provide network interface devices to enable customers to ascertain the location of a fault but if the fault is external, the customer can chose either GT&T's paid services or any other business with such services to rectify the problem. The company is adding a new charge for new customers wishing the company to complete their internal installation and for internal fault services as well.
The company expects revenues from international inbound services to fall to $3.1 billion this year but said if the lowered rates reach foreign customers, then the minutes terminating in Guyana can increase by $1.2 billion or 40%. Outbound revenue is projected at $2.4 billion with accounting rate settlement expenses projected at $1.3 billion, realising net revenue from this service of $1 billion.
The company on Decem-ber 31st applied for rate increases to realise its minimum guaranteed rate of return given the US Federal Com-munications Commission's denial of its request for a waiver on reduced settlement rates of US 23 cents per minute for calls from the US terminating here.
The PUC on its own initiative set January 9th as the date to hear GT&T's case to recoup revenues it expects to lose through the reduced US settlement rates and the firm is asking for its rate hearing to be convened that day and for it to continue each day thereafter until completion.
The company in its application is asking for the inclusion of the controversial 6% of gross revenues advisory fee to be considered as a legitimate expense in keeping with the terms of the agreement between the government of Guyana and its parent company, ATN. Recently, the PUC in denying a rate increase to the company based on a 1997 application had excluded the advisory fees as an expense in the consideration of the company's rate of return.