Digicel’s presence leads to reduced profits for GTT

Jun 16, 2017 News, http://www.kaieteurnewsonline....ced-profits-for-gtt/

Since the 2007 arrival of Digicel in Guyana, the Guyana Telephone and Telegraph Company (GTT) has been recording reduced income. This was noted by the Public Utilities Commission (PUC) in its June 9, 2017 decision to approve the hike in rates for landline services and the reduction in charges for international calls.

According to the PUC, figures submitted have shown that over the years GTT was earning in excess of 20 per cent on its return on capital dedicated for public use but with the arrival of Digicel, income began to reduce.

The Commission noted that Digicel is involved in the cellular services. It currently has a mobile market share greater than GTT since it has attracted very many of GTT’s consumers.

To effect changes to the rates for services offered, GTT had explained that the loss of market share has resulted in insufficient sums to adequately deal with the landline service.

This reality begs the question as to what will happen to GTT when the telecommunications market in Guyana becomes fully liberalised. Since, with a monopoly the company’s performance is being challenged by competition from Digicel particularly as it relates to the cellular market.

The PUC said that GTT has conceded that it is in default with its license obligations but requires assistance to level the playing field to expand its services.

Further, the Commission said that it would appear that enough was not done by GTT to retain the position of strength and to try to expand its consumer base.

“They were complacent with their monopoly and now faced with competition and with the coming of new regulations they recognize that they are likely to fall further behind.”

Meanwhile, Minister of Public Telecommunications, Catherine Hughes, during her mid-year press conference had said that all of the issues between the two companies have not been completely ironed out as it relates to the liberalisation of the telecommunications sector.

However, she said that it is a work in progress. According to the Minister, the most important part of the liberalisation process was passing the Telecommunications (Amendment) Bill that will allow other parties to enter the market place leading to increased competition which should result in reduced rates.

Hughes reported that currently, negotiations are on-going with Atlantic Tele-Network (ATN) and GTT. The Minister said that her Ministry is working with a July 2017 timeframe to create an environment where more players can begin entering the local market.

She said that currently there have been oral expressions of interests by some international players to enter Guyana but she believes more concrete steps will be taken.

The Telecommunications (Amendment) Bill was passed in July 2016 and signalled the end of the monopoly which GTT held over certain services.

This means that companies can now compete on a level playing field.

Hughes said that a Telecommunications Agency will be created to look over the telecommunications sector and ensure that there is fair competition in the market.

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