Telecoms liberalisation war heats up…GTT accuses Digicel of “illegal” Suriname bypass; wants independent audit

Mar 26, 2017 News

As negotiations continue to liberalise the telecommunications sector to allow new players, US-owned Guyana Telephone and Telegraph Company (GTT) is calling for an independent third party audit of what it says are

Digicel is accused of establishing illegal Suriname link to avoid paying taxes.

“illegal” activities of Digicel.

GTT yesterday, in one of its toughest statements yet, said that its call would come given recent developments and news accounts regarding “illegal activity” being conducted by Digicel.
“We believe it is time for action that gets to the bottom of this situation and finally provide transparency for everyone in Guyana,” GTT said.
According to GTT, Digicel, a company that has a licence for mobile services, has been facilitating an “illegal, unlicensed trans-border link between Guyana and Suriname”.
GTT said that there is no ambiguity about this bypass activity. In fact, the company said, in a demonstration of “remarkable arrogance and disregard for rule of law in Guyana”, Digicel itself has acknowledged the operation on several occasions.
“Just as recently as March 21, 2017, Digicel told the PUC (Public Utilities Commission) that its bypass operation was not appropriate for the discussion at hand, while never once denying any aspect of the operation.
GTT said that it knows that this “bypass” is causing very real and very significant harm to our country – by one estimate, it has cost the country an “incredible” US$30M over the last five years.
“With liberalization on the horizon, the practice of equity and transparent conduct of all players is of paramount importance. It is essential that both the public and our leaders have the complete details about Digicel’s bypass operations, and that they understand the full consequences of the company’s actions, which are illegal and in direct violation of their license.”
GTT recommended that Government initiate an independent, third party audit, or, investigation into Digicel’s alleged activity.
“It appears that Digicel’s bypass operation has been active for more than five years. And over the last two years, GTT, and others who support a fair and competitive telecoms landscape, have called out this situation to various governmental agencies.”
GTT said that over time, and especially more recently, it has been assured that the matter has the attention of the local regulatory authorities.

GTT is demanding an independent probe into Digicel’s alleged installation of an illegal bypass with Suriname.

“However, to ensure openness and forthright conduct, and to establish confidence that all interested parties are being treated fairly and equitably, the Guyanese people must know the complete details of the unauthorized cross-border link.
“While Digicel acknowledges the bypass activity, the company has never answered questions or provided any specific information – instead, it makes excuses or launches new and unfounded claims that are meant to distract the public and the media.”
GTT pointed out that since assuming office, the government has pursued a number of audits to bring clarity to various aspects of the economy.
“Given the financial significance of an illegal bypass operation, it would certainly seem appropriate for a similar audit to take place here. `Secondly, we call for the public release of documentation that shows whether Digicel has made tax payments on the revenue generated by the illegal bypass operation.
Given Digicel’s acknowledgement of its bypass activity, the public deserves to know – with conclusive evidence – if the company has paid its fair share of taxes on the tremendous revenues it has reaped from this activity.”
GTT said that the operations of the alleged bypass have enormous consequences for the Guyana treasury. “Based on extensive investigation into the magnitude of Digicel’s bypass activity, it has been estimated that the company should have paid US$30M or $7B to the Guyana treasury over the last five years.
“Think about the loss to Guyana if these taxes have not been paid.”
And, according to GTT, the tax losses are just one part of the equation.
“In order to operate the bypass, Digicel must use valuable spectrum – spectrum that, by all appearances, the company has simply taken as its own, without payment. We all have a right to know whether this spectrum has, in fact, been stolen by Digicel.”
The liberalization of the telecoms sector has taken significance as GTT holds the monopoly on landlines and international calls.
The entrance of Digicel has brought competition with consecutive governments signaling its intentions to allow other players to introduce new services and bring down internet and other costs.
However, GTT has been insisting that it wants negotiations as an open playing field for the sector to impact its investments.
The company has been criticized for not introducing landlines to new housing schemes despite growing demands for internet.
GTT is currently before PUC, the regulator, for an increase of rates on its landlines.
However, consumer advocates, have also accused GTT of not being truthful of its earnings.
GTT has already cut staff in preparation for competitive playing field when liberalization becomes effective and new companies enter the market.