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GTT proposed rate hikes similar to Berbice Bridge fiasco – Ramon Gaskin
Auditor and Private Consultant, Ramon Gaskin, chided representatives of Guyana Telephone and Telegraph (GTT) on Monday last at the final hearing for their application to the Public Utilities Commission (PUC) for “Approval of a Tariff Regime for Access and Landline Metered Charges”.
Gaskin pleaded with the commission to reject the application of the telecommunications provider, offering multiple arguments in support of his position. Speaking on the proposed increased landline metered charges, he said that they sound a lot like the steep increases that were introduced by the Berbice Bridge Company, before the government took control of the bridge.
Auditor and Private Consultant, Ramon Gaskin
The company intends to raise the current intra-network rates of $0.80 and $0.40 off-peak to $1.25 and $0.75 off-peak. Gaskin said that these increases are 56.25 percent and 87.5 percent respectively. He said that while the company is supposed to provide just and reasonable cause for the increases that it is requesting, it has failed to provide such a justification for increases of such magnitude.
Gaskin said that the prospect of competition coming in the future, from the liberalisation of the telecommunications sector, is not justification enough for the PUC to grant the tariff regime and new landline metered charges. He posited that GTT’s intention is for the PUC to grant its increases before liberalisation, so that GTT does not have to bear the brunt of loss that would come with it making a decision to hike its rates when regulation decreases.
He further stated that the application for rate increases must be evidence-based, and that the company has failed to provide all of the information required by Public Utilities Commission to process such an application, including that it has not shown the impact such increases would have on the consumer.
Gaskin said that he has doubts that GTT’s stated profits on the accounts it provided are the same as its tax returns would imply.
Finally, he said that GTT wants compensation from the consumer for the loss that they would incur from the expected liberalisation of the telecommunications market. He said that instead of expecting consumers to foot that cost, the company should look to the government.
The application, dated October 1 last, was made on the premise of “rebalancing prices of telecommunications services” in anticipation of the liberalization of the telecommunications industry. The company claims that the new tariffs and rates on their landline service are necessary to bring prices for different services in line with the cost of providing those services.
The company is proposing an increase of $50 on access for its services because “there is a great gap between the price (tariffed rate) and the cost to providing said service.”
GTT’s application states that even though a tariff review was granted last year, that was due to the fact that there was an increase in local rates and a decrease in international rates, making the rate of return experienced by GTT to be minimal. As such, it posits that GTT’s rates must align with underlying service costs “prior to the formalized introduction of competition”.
President of the Guyana Consumers Association, Pat Dyal, had said that the body rejects the proposal made by GTT to have these new charges implemented. He urged the PUC to consider the application as invalid, at the first hearing held on this application by the PUC at Roraima Duke Lodge, on October 24.
The GCA’s responding statement had said that GTT is “slyly trying to lead the PUC into the trap of fundamentally negating the functioning of the Free Market and disturbing its mechanism of achieving price equilibrium.”
The GCA stated that GT&T has failed to comply with its contract with the Government of Guyana and the Public Utilities Commission to increase the number of landlines. Hence, the GCA said that GTT cannot claim increased rates in the same sector for the very service it has failed to provide according to its agreement with the PUC and the government.
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