`...I guess no one was listening or they just did not hear' - GT&T's Chief Executive Officer, Ms. Sonita Jagan

THE Guyana Telephone and Telegraph Company (GT&T) is blaming the Government, the watchdog Public Utilities Commission (PUC) and consumer groups for proposed steep increases in telephone rates because of the delay in processing earlier requests.

Chief Executive Officer of the company, Ms. Sonita Jagan yesterday said the tariff rebalancing for which the company has applied to the PUC should have been phased in and if the process had started when first requested four years ago, GT&T would not have had to apply for such big increases at this time.

GT&T is proposing to increase domestic telephone rental from $250 to $1,500 and business/commercial rental from $1,000 to $3,000 monthly.

It proposes to increase calls within exchanges from 20 cents to $4 per minute during the day, and from 10 cents to $2 per minute at nights and is looking at an approximate 75 per cent increase for out-of-exchange-calls.

In terms of international calls, it proposes that rates for all countries, except the United States and the United Kingdom, remain the same but that there be one off-peak rate. The rates to these two countries would be reduced with one rate being applied to both locations, $136 during peak hours and $123 during the off-peak hours.

The company also wants Internet users to pay for its line service, which is currently not paid to GT&T, and all international rates be rounded to the nearest dollar.

GT&T's proposal to increase rates is in light of the United States Federal Communications Commission (FCC) order that kicked in January 1, bringing the rates that the U.S. carriers pay to Guyana down from US85 cents to US23 cents.

The FCC issued its Benchmark Order in August 1997 and GT&T said all stakeholders were apprised of the proposed "glide path" that would allow the settlement rate with the U.S. carriers to reach US23 cents per minute by January 1 this year.

"We knew this was coming...I agree it is a big jump but we should have gotten there over the past four years", Jagan told a news conference yesterday at Le Meridien Pegasus Hotel in Georgetown.

She claimed the Government ignored the unfolding reality and the PUC was resolute in its refusal to acknowledge the logic.

GT&T said that without the assistance or moral support from the Government, consumer groups or the regulatory body, the company fought the inevitable and bought time for an orderly transition to lower settlement rates.

"We challenged the FCC action in the U.S. courts, fought AT&T and the other American carriers to maintain the US85 cents per minute settlement rate for as long as possible, and sought a waiver of the Benchmark Order with respect to Guyana", the company said in a document 'Telecommunications in Guyana - Portrait of an Industry in Trouble'.

Jagan explained that GT&T had to file for rate increases, the last in 1997, when the FCC issued the order. She recalled the company appealing to the Government and the PUC for gradual increases, noting that in four years, it would have been enormous.

"...but I guess no one was listening or they just did not hear", Jagan stated.

She said the reality now is that "nothing happened" over the past four years and the FCC order has come into effect.

The company made a rate-filing with the PUC with the expectation that some proper rate structure or variations would have come into effect with the FCC order.

It projected earnings at a 1.05 per cent rate of return on its invested capital for wire-line services. It said that to achieve the minimum 15 per cent rate of return, GT&T requires additional revenues of $5,556M by way of increased rates and charges.

GT&T said it is now at a crossroads and its viability is threatened by the fundamental changes in the settlement of international traffic and regulatory inertia.

The PUC held a hearing Wednesday with the phone company, but the application for increased rates the company made in its quest to recoup revenue it says it expects to lose through the reduction of the international settlement rates, was suspended for six months.

The first hearing to fix temporary rates was set for January 15 at the Hotel Tower in Georgetown at 16:00 hrs.

The consumer groups are, however, unhappy that the commission will grant GT&T a hearing for a temporary order. Ms Eileen Cox of the Consumer Advisory Bureau and the Guyana Consumers Association noted that this is "just as bad" as a permanent order.

GT&T said retrenching of staff members is a possibility if there is no positive response to its proposal for the rate increases.

However, the company yesterday said there are things that can be done to prevent having to increase the local rates.

Jagan noted that if the U.S. carriers drop their collection rate, which is what overseas callers pay, more calls would come into Guyana and GT&T would receive more on the settlement rate.

She said the company can only hope that the U.S. carriers consider a sizeable reduction which would stimulate the number of calls coming into Guyana.

Jagan also said the rates could be affected if the operations of the host of new Internet cafés that are opening around the country are regulated.

GT&T is accusing the Government and the PUC of encouraging illegal voice over the Internet operations, claiming that it violates the company's licence and undermines the international telecommunications business that it has been made to be inordinately dependent upon.

It said the networking firm, I-Net Communications, by offering for resale international satellite services that bypass GT&T's facilities, continues to operate in violation of its own, and GT&T's licence.

Jagan said the company is losing a significant amount of revenue as a result of these practices and numerous complaints to Prime Minister Sam Hinds, who has responsibility for telecommunications, have been going unnoticed.

She said if that money was going to GT&T, it would help offset revenue lost, and could defray the high increases being asked for.

GT&T said the Internet service providers and the Internet cafes are allowed to operate without a licence and without any regulatory scrutiny. It said the company loses in at least three ways - it receives no compensation for network use; network congestion limits the completion of calls that bring in revenue; and it loses international revenues due to significant outbound and inbound minutes that bypass the national network.

Asked if the company's revenues would not be boosted if the rate for overseas calls from here are reduced, GT&T's Director, Rate Making, Mr. Gene Evelyn explained that the company would need about four times the number of calls it used to receive for that to happen.

He added that if the volume of calls is increased significantly, then the company would be in expense since it would need capital investment to upgrade its networks to accommodate such additional calls.