GT&T proposes hike in landline service charges

Aug 30, 2014 News

---

“GT&T has a history of not delivering to the Guyanese people,” Consumer activist, Leonard Craig contends
By Abena Rockcliffe

In a bid to justify an application for a rate hike, representatives of the Guyana Telephone and Telegraph Company (GT&T) yesterday appeared before the Public Utilities Commission (PUC).
An application from GT&T for approval of a change of rates and new rates had been made to the PUC since early July. This is with respect to international outbound calls, local wire line or landline and ancillary services.
The first hearing for this application was July and yesterday was the second.
Gene Evelyn, one of GT&T’s representatives on yesterday’s panel told the Commission that he intends to demonstrate, by any means possible, that the company is indeed in problems.
Evelyn’s comments came after he was told by the Commission that the financial statements of 2011 negates the argument being put forward to justify the application for the hike; that the company is operating at a loss.
Evelyn stated that GT&T is at present not even able to cover the cost of providing a wire line service which is like an albatross around the company’s neck.
John Audit, another GT&T representative, told the Commission that the company has to increase its rates to survive. He noted however, that even with the hike, landline rates will still be significantly cheaper than mobile charges.
Kaieteur News understands that the current service installation charge for residential areas is $500 but the proposed increase is $2000. For businesses, the current installation price is $1500 but GT&T is proposing to increase the rate to $6000.
For dial tone lines, the current monthly charge for one to two lines is $500 for residential areas. If customers require more lines the current charge is $1000. For businesses which may require one to four lines, the current rate is $1500. Lines exceeding that amount will incur a cost of $4000. However, the telephone company is proposing that customers pay $1000 if they want one to two lines for residential areas and $1500 if they require more. For businesses, they are suggesting that for one to four lines, the price be $3000 and if more, the increase would be $4500.
Audit said that GT&T is cognizant that some consumers will reject the increased rates and terminate their landline services but it is a move that GT&T must make.
He bemoaned the fact that Guyanese are moving further away from landline use.
Audit blamed this on services like Whats App and others.
The GT&T representative said that people are no longer calling each other to find out simple things like “how you doing”, they are using Whats App instead.
He noted that in such cases GT&T gets nothing.
But even with this and other arguments put forward, Consumer activist, Leonard Craig made no bones about telling the GT&T representatives that the company is wasting time, being unproductive and is having a “feeding frenzy in Guyana.”
He said that, at its inception, GT&T had enough receivables to monetize its purchase agreement price and as such could have started with a positive working capital base which would have affected positively its lag-lead analysis.
Craig reminded the Commission that in return for this monopoly, GT&T agreed to a plan to expand its facilities and operations significantly.
He pointed out that the original date for completion of the plan was December, 1993 which was subsequently amended to February, 1995, but by the end of 1999, GT&T had not yet delivered on its agreement.
According to Craig, “This demonstrates that GT&T has a history of not delivering to the Guyanese people while every single year, since its inception, it has met and extracted its 15% minimum rate of returns sought in the original agreement. As such, the Guyanese consumers have been meeting its obligation to GT&T every single year of the life of the company.”
At this point Chairman of the Commission, Prem Persaud interjected saying that if it can be proven that GT&T is extracting its 15%, the application for increase will be completely rejected as that is the basis upon which the application is made.
As Craig continued, he noted that GT&T has a lot of inefficiencies in its system “probably pointing to boardroom ineptitude; for example the E1 digitalized subscriber line service. GT&T has always had the capacity to deliver this service but waits until it is approaching obsolescence before introducing this as a service to Guyana.”
He added that ‘domestic rate increase’ – seems to conveniently refer to landline services when indeed it refers to all domestic services taken together.
The consumer activist, said, “what GT&T has done is to aggregate all its domestic costs and disproportionately attributed it to the landline service as a disaggregated cost center, thereby overestimating its share attributable to any possible cost under runs. Therefore, the imbalance may not be as large as GT&T claims it to be or may not even exist at all, we cannot rely on the calculations provided by GTT they seem to be misleading.”
Further, Craig noted that interconnection settlement service charge is $14 but GT&T charges $12 per min. He said that even with a deficit settlement charge, GT&T can and will have several surplus zones on every call, in that the settlement rate is a per second charge while the customer is billed by the minute. As such the differential will be a surplus, except in cases when a customer ends a call exactly on the minute.
Craig told the Commission that further inefficiencies occurs with the long time it takes for GT&T to issue telephone lines to businesses and residences all over Guyana.
He quoted from the National Development Strategy Chapter 6I.10 which states, “Moreover, there appears to be little rationality in the allocation of telephone connections for frequently, areas that are sandwiched between serviced districts are ignored and, far too often, individuals in particular streets are by-passed.”
Craig added that GT&T has not made any “significant” investment in changing equipment in any “significant way.”
He pelted several accusations in the face of GT&T including one suggesting that the telephone company has been taking advantage of Guyana.
Craig said that instead of making investments, GT&T chooses to “jump on the backs” of Guyanese consumers when it has a choice to be innovative.
He posited that the company has capacity that has not yet been tapped into. In citing an example, Craig pointed out that GT&T has not activated landline voicemail service “while lots of people go around buying answering machines,… this could have been avoided.”
In conclusion, Craig said that, without raising a single cent in rates GT&T has the capacity to sustain itself.
He then recommended that the Commission sends a message to GT&T to be innovative and stop “taking advantage of Guyanese consumers.
Persaud told GT&T that in two weeks, the Commission will submit further queries to GT&T.
Gene declared that the company will respond a week after that and will also reply to Craig’s concerns.

---

---