PUC blocks GTT’s application for increase in bundled landline rates

Dec 13, 2018 News

---

 

Regulators have denied an application of the Guyana Telephone and Telegraph Company (GTT) to increase a number of landline charges.
According to the Public Utilities Commission (PUC) yesterday, on October 1, 2018, the company applied for an increase in landline access charges from $750 to $800 for each line in a residence. For more than two lines, the charge would be $1,600, up from $1,500.
Businesses would have been required to pay $2,500 months, from $2,250, for between 1-4 lines.

The company also wanted approval of five residential bundled services that relate exclusively to the landline service, including an all-inclusive (intra and inter), access for $6,500 per month with call forwarding, voicemail and call waiting, and a friend and family calling bundle for five persons unlimited for $1,850.
According to PUC, after having reviewed arguments by GTT and the Guyana Consumers Association (GCA), which was objecting, it was the view of the Commission that the company had not presented a convincing case for the proposed price increases for its landline services.
“Therefore, the application is denied in its entirety,” PUC said in its order dated Tuesday, December 11, 2018.
Representing the PUC for the public hearing on an “Approval of a Tariff Regime for Access and Landline Metered Charges” were Chairperson, Dela Britton; Commissioners Maurice Solomon and Rajendra Bisessar.
Also in attendance for PUC were Secretary Vidiahar Persaud; Moorsalene Sankar, and Yogwattie Sookram – both of whom are financial analysts.
Representing GTT were Mark Reynolds – Director, Legal and Regulatory Affairs; Delreo Newman – Director, International Regulatory, Government and Legal Affairs and Mark Singh, Vice President, Finance Corporate Control.
For the GCA were the president, Patrick Dial and advisor, Yog Mahadeo.
GTT argued that with the advent of liberalization, it would be necessary to rebalance rates to bring it closer to its operating cost, a position supported by the Telecommunication Act.
“To this end, the company is therefore seeking to rebalance landline rates closer to its operating cost, but intends to do so in stages and over a protracted period, in order to avoid creating rate shock to its consumers.”

As it relates to the five bundled services, the company noted that the customer has the option to choose any bundle that the customer may perceive as advantageous. The customer under this regime has the prerogative of opting out of the bundled package if so desired.
GCA, on the other hand, countered by noting that GT&T is using rate re-balancing as a guise for its application to increase consumer prices.
“The GCA had expressed its reservations on the model, noting that in the absence of precise data that can be easily collaborated, it would be difficult to be guided by the model, and the GCA is of the view that the guaranteed rate to which GT&T speaks of, is an entitlement, and not a guaranteed rate. The GCA stated that in order for GT&T’s application to be properly dissected, pertinent information should have been provided on: 1) the impact on the subscribers, and 2) the accrual of the anticipated incremental revenue to the Company,” the PUC order explained.
In its decision, PUC said that it is not convinced that the expenses accurately reflect a cost-efficient utility, taking into consideration the size and the scope of the operations of the company, and whether the values of the non-current assets as stated in the company’s financial statement were acquired at market value at the time of acquisition.
Significantly also, the regulator said that it had to consider whether the company had adhered to the tenets of its licence, which makes provisions for universal service, especially as it relates to rural areas.
GTT has been accused of ignoring installing landlines in rural areas, instead, concentrating on mobile phone network expansion. With landlines key to DSL internet service, this factor has been a sore one.
PUC said that the company has purported to have invested heavily in non-current assets for more than a decade, but same is not reflected in expected profit progression or in the quality of the company’s services to its customers.
“Having regard to all the factors as mentioned above, it is the view of the Commission that the Company has not presented a convincing case for the proposed price increases for its landline services. Therefore, the application is denied in its entirety,” the order said.
Government has announced a year-end breaking of GTT’s landline and overseas calls monopoly by introducing new players into the industry.
The liberalization process has been dragging on a number of years now, with critics blaming the development of the technological sector on poor internet service.

---

---