Cel*Star to invest over US$25M by time cellular service is launched
-rebuffs GT&T's charge
June 4, 2004
Cel*Star will have invested in excess of US$25M in Guyana by the time its cellular service is launched, the company stated yesterday. And over US$10M has already been spent with the remainder being held up by the interconnection delay, according to a press release from Cel*Star.
The company yesterday said it had to "set the record straight" since in a letter to Prime Minister Samuel Hinds which was made public on Wednesday, GT&T's General Manager Sonita Jagan had "sharply criticised the government" over the government's decision to order the Guyana Telephone and Telegraph (GT&T) to put on hold its implementation of the Global System for Mobile Communication (GSM).
Cel*Star has been at odds with GT&T over the latter's decision to delay an interconnection agreement because of a court case which revolves around ownership of Cel*Star. As a result Cel*Star has not been able to move ahead with its plans which include a GSM system.
"While this is clearly an open discussion between the government and GT&T, the misrepresentation of facts, especially concerning Cel*Star must be addressed," the release said. It said further that GT&T had stated that the country and the people of Guyana would get nothing from Cel*Star. This statement Cel*Star deemed absurd.
According to Cel*Star, its current commercial plans call for US$35M over the next few years. The company said that it now employs 30 Guyanese, uses the services of many local companies, and contributes to local community and non-profit organisations.
"When Cel*Star is finally able to offer service it will directly employ nearly 100 people, distribute products and services through many independent distributors and use the services of local companies to an even greater extent. More importantly though, Cel*Star will bring the well-established benefits of competitive telecommunications service to Guyana," the release stated.
The government had issued a press statement on Tuesday evening saying that on May 28 the National Frequency Management Unit (NFMU) had advised GT&T to put on hold all of its plans and programmes to implement a GS locally.
According to the government, protracted delays in opening up the market for competition - presumably to Cel*Star - are resulting in inefficient use of the GSM 900 MHz band by limiting it to a single operator.
GT&T however says the government appears to be showing bias in putting on hold the company's new cellular system and warned that such decisions would deter rather than encourage competition in the sector.
According to GT&T's general manager, in the letter to the prime minister, the instructions were not founded on any legal basis but seemingly personal preferences. Jagan said further that such an instruction from the government clearly violates its earlier permission in 2003 via the allocation of frequencies to operate and install the new GSM system.
Jagan said also that the dispute as to ownership and representation of Cel*Star Guyana and the issue of continued interconnection are before the High Court and the Public Utilities Commission (PUC) respectively. There-fore, she argued, the NFMU move against GT&T can be interpreted as defiance of the judicial system and the rule of law.
The Cel*Star release said that in October 2003, GT&T unilaterally stopped interconnection work with it, effectively denying the interconnection service and unjustifiably delaying cellular competition in Guyana. GT&T has cited the pending litigation between Cel*Star and an unrelated third party as their basis for this decision. Cel*Star said that under the legal and binding interconnect contract between the companies, there are no grounds for delaying or stopping the service on this basis.
The company further contended that GT&T continues to reject all its efforts as well as those of the government to get interconnection back on track. Cel*Star argued further that the continued delay in interconnection is a direct result of GT&T's abuse of its monopoly power which ensures there is no "level playing field." But Jagan had insisted in the letter to Hinds that GT&T had no fear of competition but simply wanted a level playing field. She referred to the 45% multi-year tax holiday provided to Cel*Star by the government which GT&T did not benefit from or from any form of assistance by way of a loan or capital.
But in Cel*Star's view it was no coincidence that GT&T used the recent period to build its own GSM system. And considering that GSM technology was introduced over a decade ago and is currently employed by over 75% of cellular users worldwide, Cel*Star said it had to wonder what took GT&T so long to move forward with advancing its system.
Cel*Star said it "applauded the government's ongoing efforts and continued commitment to bring competitive telecommunications services to Guyana." Such services are essential, the release said, to improve economic conditions and put Guyana on an equal footing with the other countries in the region.
Government's role in any competitive environment is to ensure an even playing field, Cel*Star noted.
And if GT&T indeed has "no fear" of competition, Cel*Star maintained, they should open the interconnection, and stop using their enormous monopoly power for market advantages through thinly-veiled self-serving positions.