Liberalised telephone industry will slash costs - Jagdeo

Liberalised telephone industry will slash costs – Jagdeo

Jul 22, 2009 News

…defends sale of shares in GT&T

President Bharrat Jagdeo on Monday said that his intention to liberalise the telecommunications sector will lead to cheaper costs and enhanced services to customers.
In an interview, the Head of State said that the liberalization will enable greater international connectivity since studies have shown that more than 25,000 young Guyanese can be employed in the Information Communication Technology (ICT) sector.
Lashing out at the opposition parties’ recent comments on the sale of Government’s 20 percent shares in the Guyana Telephone and Telegraph Company (GT&T), Jagdeo said that these political parties do not mind harming thousands of Guyanese if the political contributions are right.
Leader of the Alliance For Change, Raphael Trotman, said that the recently announced intention by the government to sell its 20 per cent shares in GT&T raised more questions than answers.
According to Trotman, he was curious about the manner in which the assets will be disposed of and why the government would want to sell a source of revenue in the first place, given the current economic climate.
The People’s National Congress Reform has called for an investigation behind the reason why the Government wants to sell its shares in the company.
The Opposition is contending that the real motive behind the selling of these shares is intended to ‘benefit the friends and supporters of the PPP’.
During the interview on Monday, the Head of State said that if Trotman and the other political parties are serious about presenting themselves as ‘credible leaders’, they need to be familiar with the issues over which a President has to preside.
He scolded the parties for arguing over ‘petty issues’ when the country faces serious challenges to its continued development.
According to the Head of State, the sale of the 20 percent minority shares will go through a public tender process, like other projects, which is forwarded to the Privatisation Board, which makes the recommendations before it is forwarded to Cabinet.
He said that he is ‘very disappointed’ with the calls by Trotman, since he was a member of the People’s National Congress (PNC) that sold the telephone company in ‘great secrecy.’
Jagdeo said that in the deal that was struck between Atlantic Tele-Network and the PNC, an 80 percent stake in the telephone company was sold for the sum of US$16M to Atlantic Tele-Network (ATN) and was guaranteed an investment return of 15 percent.
He said that the six percent advisory fee on gross revenues and a multi-year monopoly on international calls were involved in that deal.
The Head of State pointed out that as a consequence the GT&T parent company has received US$80M in advisory fees since the sale.
The US$16M purchase price was recovered in two years of operations.
Meanwhile, this newspaper was told last week that the GT&T parent company has rejected the offer to buy Government’s 20 percent shares in the telephone company.
A source stated that ATN at its recent Board of Directors meeting declined to purchase the shares.
Last year government collected $1.5B in taxes from the company and $265M in dividends.
The Opposition is contending that the real motive behind the selling of these shares is intended to ‘benefit the friends and supporters of the PPP’.
During a press conference two Fridays ago the PNCR called for workers of GT&T to be afforded the first option to buy the shares.
According to PNCR Vice Chairman, Basil Williams, the party would insist on this position and oppose any attempt to deny the workers of the company the right to own those shares.

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Liberalised telephone industry will slash costs – Jagdeo

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