Local rates for internet service crucial - Jagan
Stabroek News
February 5, 2004
If the utilities watchdog approves a proposal for internet users to be billed at local rates, the phone company says, its financial position will improve.
The Guyana Telephone and Telegraph Company (GT&T) set a US$45 million budget for expansion since 2002 and the largest chunk is being spent this year.
Sonita Jagan, GT&T's chief executive officer says the company is unable to secure external financing for its expansion and must find this from internal resources. She says the company's rate base does not allow for a "normal" viability and it therefore has had to be very "thrifty" in its spending.
The phone company had applied for internet users to be charged at local rates in January 2003, but the PUC is yet to rule on this. Instead, it has issued a temporary order, which grants increases in local rates, taking these up within exchanges to 60 cents at peak and 30 cents at off-peak hours.
Jagan says the company's cellular operation pays its way and so did its international long distance service, but local service revenue has been out of line with economic factors. And with the implementation of the US FCC benchmark order to lower accounting rates to US 23 cents, the company's receipts from international calls are also affected. Additionally, the talks on rebalancing rates with the government are on hold indefinitely, pending the outcome of talks with Cable and Wireless for a possible buyout of GT&T.
Jagan says she would happily settle for internet users being charged at local rates in the face of what is taking place.
"Right now, in essence, we have a case where the poor is subsidizing the rich. Whenever a person sits on the network, it is costing GT&T to maintain that network and more than a third of the network minutes (an estimated 35 million minutes) are freeā€¦ it is not fair for GT&T to be maintaining the network free of cost to users," Jagan told Stabroek Business recently.
Jagan, at a recent media briefing, unveiled a massive expansion programme which will see the company increasing residential land lines to an estimated 92,000; out of a total estimated 126,000 households. However, the company is awaiting the results of the census to determine accurately the number of households, given migration.
But with the existing numbers, at the end of this year, the company would have achieved with 13,000 new landlines, coverage of 73% of the residential population. The penetration rate of the company is 15% whereas Jagan says for a country as Guyana the rate should be seven per cent. She says the company is not a long way off from fulfilling the requirements of residential customers.
She also notes an artificial demand for service, as in some areas it is not economically viable to provide a service and in some areas the demand is inflated as everyone in a household has applied for separate services.
The company is also investing in phone booth services for remote areas, is launching its GSM cellular service and is extending coverage of its cellular service to Mahdia and Lethem.
Jagan says the "full" expansion programme being embarked upon is in no way connected to Cable and Wireless interest in the phone company or the government's decision not to continue talks with GT&T's parent company, ATN on breaking its monopoly.
"We continue business as usual... there are no serious talks going on and we will not sit back, relax and wait. We really are committed to Guyana and we are working on that," says Jagan. The initial expansion programme of the company, which had been the subject of much controversy, was completed in five years and saw 30,000 lines being installed. Jagan says despite the progress of the company, there are still negative comments and notes that GT&T pays 30% of total corporate taxes in the country and has paid the government US$12.1 million in dividends. The controversial advisory service fees paid to ATN over the past 13 years would have been US$52 million while dividends would have been US$48.4 million.
Jagan says GT&T is proud of its record and its accomplishments are far in excess of expectations. She says she operates with a full complement of Guyanese on her management team and they recognize what needs to be done to push Guyana forward.
"We are dedicated to playing our role," says Jagan adding that the firm is facilitating others in working with Guyana as well.