Interconnection agreement back on track
-interim court order to protect GT&T, Cel*Star from ownership dispute
Stabroek News
July 16, 2004
The impasse over interconnection between GT&T and Cel*Star Guyana appears to be resolved with the High Court set to issue an interim order that will allow Cel*Star Guyana to carry on business pending the resolution of a suit disputing its ownership.
Cel*Star Guyana faces a court action from Cel*Star Caribbean over its ownership, and GT&T has been wary of having dealings with the company for that reason.
But in the past three weeks the parties have held several meetings with Attorney-General Doodnauth Singh and on Tuesday agreed that the High Court would issue an interim order sanctioning the continuation of Cel*Star Guyana's business pending the resolution of the court action.
This order basically indemnifies GT&T from any further actions that might arise should Cel*Star Caribbean win the court case and take control of the company. GT&T was asked to draft an agreement outlining the points discussed and this has been sent to Cel*Star Guyana for their comment and approval.
Meanwhile, earlier this week, Cel*Star Caribbean's lawyers were contacted on whether they would agree to the order and they consented. A government source, in confirming the agreement, noted that Cel*Star Caribbean could, if it eventually wins the case, stand to gain from the order because if Cel*Star Guyana can get its system up and running that would enhance the value of the licence - a major asset for the company. But the source said the order primarily focuses on limiting the exposure of the two companies, including GT&T which would be inoculated from any lawsuit.
For the government, the agreement would pave the way for competition in the sector, something it has been pushing for some time. The government, at the beginning of June, had ordered that GT&T stop all its work on a new cellular system it had already installed, citing the inefficient use of the GSM 900 MHz band by limiting its use to a single operator. The decision came at a time when the phone company had already installed the new system and was set to launch it in the next few weeks. GSM is one of the new services that Cel*Star proposed to offer and which it intended to use to establish market share.
A statement yesterday from GT&T said "a consent order between the parties will be filed in the High Court which seeks to ratify the ability of the present managers of Cel*Star Guyana to continue doing business with GT&T until the High Court decides the dispute as to the ownership...The agreement also allows for mutual waivers between the parties."
GT&T adds that it was never against the interconnection but had reservations based on the dispute.
A Cel*Star press release said the company was pleased by the return of GT&T to the negotiating table. Cel* Star's attorneys are now currently reviewing a proposal submitted by GT&T and it is cautiously optimistic that the two parties can formally agree on a way forward."
Pierre Strasser, Chief Operations Officer of Transworld Telecom (TWT), Caribbean, Cel*Star's parent company (pending the court matter), told Stabroek Business he was guarded in his optimism, happy that an agreement had been reached but "as long as the physical interconnection is not complete it is not complete." He said if all goes to plan subscribers could be making calls as early as September. He said the equipment (Nortel Networks GSM solutions) was on the boat and should arrive next week. He added that the company has already invested US$10M and will eventually sink a total of US$20M into the project.
This breakthrough could render less urgent, a move by the Public Utilities Commission which asked the Appeal Court to rule whether it could direct GT&T to implement the interconnection agreement. But the Cel*Star press release notes that the "empowerment of the PUC as a matter currently before the Court of Appeal remains extremely important to the ongoing success of competition. Cel*Star believes that the current matter before the Court of Appeal is crucial, even in light of the pending negotiations between Cel*Star and GT&T insuring open competition in Guyana for the benefit of the consumers."
As for the local hearing into the ownership dispute, he said that was up for another hearing on July 26.
The issue of interconnection, a mechanism essential for enabling seamless service between subscribers to different systems, came to a head in November when GT&T was advised to cease dealings with Cel*Star (Guyana) Inc, with which it signed an interconnection agreement on April 4, until the dispute over the company's ownership was settled.
GT&T was advised that should it continue to implement the interconnection agreement, given the legal challenges and the failure of the firm to provide the proper authority, it would do so at its own peril and should await a determination or settlement of the dispute.
At that time there were ownership challenges before a Florida court against former Cel*Star Chief Executive Officer, Wesley Kirton, and in the Cayman Islands against the current owners of Cel*Star Guyana Inc, TWT Caribbean respectively. Both cases were later dismissed.
TWT Caribbean, owned by the Hon Group of Companies controlled by Barry Hon, in June last year struck a deal with Kirton to purchase all of the 500,000 shares he vested in himself to take over the operations of Cel*Star Guyana Inc which was in receipt of a GSM 900Mzh licence to operate a cellular service.