TRINIDAD AND TOBAGO: Dogfight Over Cellular Licenses

By IPS Correspondents Reprint | | Print |

Peter Richards

PORT OF SPAIN, Jun 9 2000 (IPS) - The Trinidad and Tobago government’s plans to liberalise the telecom industry have given rise to confusion, allegations of nepotism, legal battles and a call by the opposition for an official investigation into how cellular licenses are being awarded.

The government has proposed to divest its 51 percent shareholding in the Telecommunications Services of Trinidad and Tobago (TSTT) and immediately open up the market. However, Cable and Wireless, which holds a 49 percent interest in TSTT, the monopoly telecommunication company here, supports a phased liberalisation process.

“Phased liberalisation does not mean slowing down the process, it just means an orderly transition to liberalisation, so that sustainable competition is achieved,” says Roland Bynoe, legal advisor to Cable and Wireless.

All Cable and Wireless is interested in is “fair competition” and a chance to compete on the same basis as other market players, Bynoe says.

But Implementation Minister Lindsay Gillette, who is playing an active role in the liberalisation process, wants an immediate opening of the telecom market.

“I don’t believe in phase. I believe in opening it up right away,” he said.

As a first step towards the liberalisation process the government is soon to award cellular licenses. But that process is being questioned amid media reports that among those to benefit include a company owned by Gillette.

Prime Minister Basdeo Panday, pointing to the impartiality of the decision-making process, says that accounting firm Price Waterhouse Coopers has submitted recommendations to his office for the award of three cellular licenses.

The Chamber of Industry and Commerce has called for openness in the matter, saying, “much of what is taking place is shrouded in secrecy.”

The private sector body is now urging the Basdeo Panday administration to publish the recommendations of a 1997 Working Group, which prepared a draft National policy on Telecommunications. The group, chaired by current Central Bank Governor Winston Dookeran, had recommended that the Telecommunications Authority Act be amended to make it consistent with the desired new framework.

The Caribbean Association of National Telecommunication Organisations (CANTO) has also accused the government of not being “sufficiently transparent” in its bid to dismantle the industry. CANTO’s secretary general and a former Finance Minister Selby Wilson says the government is yet to articulate its position on liberalising the telecommunications sector.

“I don’t care whether it is fast or slow, I think it should be totally transparent and credible,” Wilson said at a conference organised by the American Chamber of Commerce on “Telecommunications in Trinidad and Tobago, the way forward” last week.

He warned that investors could be deterred if transparency and credibility were “manipulated by the political directorate.”

“It is not just a question of opening up the market, but putting the proper regulatory framework in place,” he said. The opposition Peoples National Movement (PNM) has called for a “full-scale inquiry” into the granting of a cellular license to Open Telecom, a private company owned by the Gillette family.

Opposition Leader Patrick Manning described the move as “highly irregular” noting that the cabinet telecommunications committee had rejected the company’s bid because it was not qualified technically or financially to provide the needed services.

The National Alliance for Reconstruction (NAR), the junior partner in the present coalition administration described the award of the license to the company as “outrageous” and was indeed a “blatant conflict of interest.”

But Prime Minister Panday has rejected the charges, saying the call for the inquiry was “a bluff” on the part of the opposition. The Director of Telecommunications, Winston Ragbir, had ranked Open Telecom first among the bidders for cellular licenses.

Open Telecom has linked up with Intercom Holdings of the United States and MTT/ALIANT, a Bell Canada cellular provider. The other bidders include CARITEL LTD, a partnership involving a local business conglomerate and the US telecommunications firm Motorola Inc, and Trinidad and Tobago Digicell, a joint venture between a local insurance firm and ESAT Relays of Ireland.

But Open Telecom did not figure in the recommendations of the Licensing Committee established last year by former Minister of Telecommunications Rupert Griffith to make the appropriate recommendations.

Ragbir dismissed the committee’s findings saying that under the law, he had the power to evaluate the applications. “I am the one to evaluate applications for all telecommunications licenses and to make recommendations. I am not aware that anyone has fired me,” Ragbir told the local media.

But Griffith, who is now Minister of Training and Distance Learning, said the Director of Telecommunications had no responsibility to “rank anybody”.

Griffith’s five-member Licensing Committee which included International Telecommunications Union (ITU) consultant Dr. Fritz Ringling sent its recommendations, in which it bumped Open Telecom, to Prime Minister Panday in March.

The committee’s chairman Dr. St Clair King, a lecturer at the University of the West Indies (UWI) said it was “not evident” that the authorities were moving to protect the public’s interest as a shareholder and user in the (telecom) industry.

“Any award of licenses now without the supporting detailed legislation will throw the industry if not into chaos, surely into a disjointed situation that is not to the advantage of the people of this country,” he said.

But Peter Gillette, Open Telecom’s chairman dismissed King’s warning, saying the situation is similar to what occurred in Britain where cellular licenses were awarded before the appropriate legislation.

“Our situation in Trinidad and Tobago is very similar in that we have existing legislation under which licenses can be granted. It is new legislation that will bring meaning to those licenses by clearly defining the rules and regulations in relation to a host of issues, including interconnect and the role of a regulatory body,” he said.

But King says awarding licenses before the appropriate legislation could result in the loss of millions of dollars to the country, given the fact that radio spectrum necessary for cellular operations could be sold, rented or leased at commercial value.

“Jamaica has just auctioned two cellular licenses for almost 100 million US dollars,” King said, noting “if licenses are awarded before this decision (legislation) is taken, the country stands to lose some 150 million US dollars depending on the number of licenses awarded.”

However, on Monday this week, a High Court Judge granted a conservatory order to the Caribbean Communications Network (CCN) staying the process for the award of cellular licenses. The local media conglomerate had applied for the grant of a cellular license and was short-listed according to the report of the Licenses Committee submitted in March to Panday.

But since then Panday has announced that three of the applicants had been short-listed and the Director of Telecommunications has indicated that CCN was not one of them. The order, granted by the court is directed to the Prime Minister and his Implementation Minister. Among the terms of the order, include one to stay the further processing of any proposal for cellular licenses.