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As December liberalization looms… Govt. conducts valuation of telecoms spectrum
GTT’s CEO Justin Nedd
Government has engaged overseas experts to determine how it will allocate the very limited spectrum available for new companies entering the telecoms business. It may mean that new telephone companies may have to pay big, in keeping with international trends.
The frequencies are critical to the rollout of services like mobile phones, but with a number of competitors interested in the market, the premiums on these have taken new meaning.
Some countries have gone the route of inviting bids for various frequencies, making tens of millions of dollars.
In the past, close friends of the previous administration of the People’s Progressive Party/Civic benefitted from frequencies in anticipation of the liberalization of the sector. In so doing, Guyana benefitted little from the allocation process.
The Coalition Government has been under pressure to place a value on the frequencies that are available.
The Guyana Telephone and Telegraph Company (GTT) has been clamouring for more frequencies to roll out more services and stay ahead of the game.
On Tuesday, Minister of Public Telecommunication, Cathy Hughes, disclosed that the Government of Guyana is anxious to get the process of liberalization over and done with.
She is sticking with the adjusted deadline of December month-end.
“I have said it will be completed by then, given the progress we are making,” she said in response to questions posed by Kaieteur News. She disclosed that her ministry had hosted a consultant here last week who spoke with stakeholders on spectrum.
“And we are getting advice on how it will be allocated and the pricing policy we should adopt.
In three weeks we will have a report on the findings for us to consider,” she said.
Government and GTT, controlled by US-owned ATN, are in negotiation to break the landline and international calls monopoly of the company. There have been delays.
GTT’s competitor, Irish-owned Digicel, has already signaled an interest in landing a submarine fibre cable and expanding its services. A number of other companies are interested too.
On Tuesday, during a press conference hosted by GTT, the company’s Chief Executive Officer, Justin Nedd, insisted that monopoly of GTT is only on paper.
Acknowledging that liberalization will bring a gamut of new competitors and services, Nedd said that while his company has the monopoly on paper in relation to international calls and data, it is not the only one offering such service. He admitted that the landline, which is unprofitable, is the only area which GTT has some level of monopoly.
The CEO argued that GTT already operates in a “competitive space”.
He noted that liberalization would only level the playing field when all players operate equally in terms of the conditions – like the 45 percent tax that GTT pays and other regulatory rules.
However, the CEO was boastful in fancying his company’s stay at the top with an “awesome” team.
With regards to engagements with the Government, he said that negotiations centred on the exclusive licence and what GTT would likely have to relinquish.
GTT is disputing that it owes almost US$40M in outstanding taxes, and is in talks with the Guyana Revenue Authority.
Government last sat with GTT in December 2016 with the two sides exchanging documents.
However, Nedd was reluctant to commit to the year-end promise, pointing reporters instead to the ministry. He said that “on paper”, GTT is ready to liberalize the sector, with requested information supplied already to Government. He said that matter is a “complex” one, with resources of GTT dedicated to make liberalization happen.
The move to open up the telecoms sector had started in late 2000s with the Bharrat Jagdeo administration selling out its 20 percent stake of the people of Guyana in GTT to a questionable Hong Kong investor for US$30M. Jagdeo’s government then issued a number of licences with frequencies. However, the Coalition Government in entering office in May 2015 has been looking at the process with the new telecoms laws passed in July 2016 to open the market.
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