GUYANA: Utilities Commission Orders Telecom Rates Reduction

By IPS Correspondents Reprint | | Print |

GEORGETOWN, Oct 13 1995 (IPS) - Guyana’s Public Utilities Commission (PUC) has ordered the transnational company running the country’s telecommunications system to reduce its overseas rates by up to 50 percent.

The announcement, a surprise to everyone who heard it, is unlikely to endear the company, Atlantic Tele Network (ATN) based in the U.S. Virgin Islands, to the PUC with which it has been having a difficult time lately.

The PUC order to the Guyana Telephone and Telegraph Company (GT&T) has demanded that night and weekend rates for overseas calls be dropped by up to 50 percent and that day time peak service charges be cut by 10 percent. Charges for the local service are to remain as they are.

The board says the company is overcharging subscribers and is raking in huge profits. It argues that the corporation is making several times more than the minimum 15 percent annual profit agreed on when it acquired 80 percent shares of the former Guyana Telecommunication Company from the state in early 1991.

The PUC says the firm needs to earn only 15 million U.S. dollars to realise its minimum 15 percent return. Revenue projections for GT&T for the period July 1995 to June 1996 are 55.7 million dollars.

The commission appears to think the level of earnings obscene and has ordered the rate reduction.

It has also demanded that the GT&T change its minimum billing from one minute to one second.

“If an overseas call is 2.20 minutes, the customer is normally charged for three minutes. Under this new system, customers will be billed only for the time they use, not to the nearest minute. These guys were getting away with murder,” said PUC secretary Kenneth Naraine.

Guyanese currently pay 74 U.S. cents per minute to the United States, the most popular dialling destination and one of the most expensive. Incoming calls from that country attract rates of more than one U.S. dollar per minute.

The company was granted a 168 percent rate hike months after it took over the country’s telecommunications system and now the PUC feels the firm is pulling in so much money it can easily survive the reduced revenues.

But ATN is not about to have the government dictate its profit margins. GT&T deputy general manager Terry Holder says it has serious problems with the PUC directive.

The commission is expecting the company to take it to court over its decision but is prepared to wage battle there.

Additionally the PUC has other bones to pick with the GT&T. The commission says the company has not lived up to its agreement to increase phone lines in the towns and expand telephone services to the interior.

“The commission was struck by the lack of concern displayed by GT&T in regard to the inconvenience and financial loss caused as a result of the failure to provide connections to applications,” a PUC statement said.

Under the agreement the GT&T should have added 21,000 lines in its first 36 months of operation. The PUC charges that the company has fallen way behind in this undertaking. GT&T says the project is 90 percent completed.

Offering service to the remote Amazonian areas of the country is nowhere near finished and the PUC says the company seems uninterested in servicing these districts because they are watching profits.

Holder says GT&T plans to use money earned from a controversial international audio text service which routes sex calls through Guyana using the country’s international code, to finance the multimillion dollar expansion programme.

But the PUC is now telling the company that revenue from this service must be counted in the general earnings of the company. Holder says if GT&T is forced to abandon revenue from the sex service it will have to ask for a rate increase.