Govt’s GT&T shares should be sold to workers – PNCR

The PNCR believes that if it is indeed necessary for the government to sell its 20 percent share in the Guyana Telephone and Telegraph Company (GT&T), employees of the company should be afforded the first option to purchase same.

These sentiments were expressed by the party at its weekly press conference held on Friday at Congress Place.
PNCR member Amna Ally, who read from a prepared statement, said the party would “oppose any attempt to deny the workers of GT&T the right to own those shares.” She said it was the workers of the company who have made it “into an effective and efficient organisation” and contended that “they should be given some preference over the political hangers-on and favoured supporters of the PPP.”

Bypass costs GT&T US$2M in revenue over eight months

Stabroek News July 26, 09
Over the last six to eight months, the Guyana Tele-phone and Telegraph company (GT&T) has lost appropriately US$2 million in revenue through international calls that have bypassed the company’s network, Chief Financial Officer Yog Mahadeo says.

In a recent interview with this newspaper, Mahadeo said this problem has been in existence for some time, but stated that there has been an increase in this activity over the last 18 months. He said this activity has not only robbed GT&T of substantial revenue but also the nation, since whenever GT&T loses revenue the country also suffers since lower taxes are paid.

What is telephone bypass?
According to the Chief Financial Officer “telephone bypass” refers to international calls that are made in and out of Guyana which do not go through the GT&T network. Currently GT&T has the licence for all international telephone traffic. Mahadeo explained that under normal circumstances, someone overseas who is making a call to Guyana would dial 592, which their local phone networks would then transfer to the GT&T switch in Guyana. At this end, Mahadeo explained, the calls are transferred to a GT&T landline or GT&T or Digicel mobile phone.

But he said that while outgoing calls which bypass the GT&T switch are an issue, it is not nearly as big a problem as the incoming calls that bypass the network. This, he explained, is predominantly an issue with calls coming from the USA and Canada.

Mahadeo said bypass occurs because of some degree of selfishness by the giant phone companies in the USA and Canada, who do not care about the revenue lost by GT&T. He said that these large companies may give phone minutes to an illegitimate bottom-house operator in North America. Calls can then be made to Guyana via these illegal operators. According to him, this bottom-house operator instead of sending the call through the GT&T network routes it directly to another illegal bottom-house operator in Guyana. Such an operator, he explained, has a bank of SIM cards which these operators use to send these calls out directly to a telephone numbers. Since these individuals do not have the capacity of the GT&T network they are forced to compress the voice and this results in telephone calls of “horrible quality”. Mahadeo said that when this happens, GT&T is unfairly blamed for the poor quality of these calls which do not pass through its network. He said that another sign that an international call has bypassed the local network is when a telephone user receives an international call which bears a local cell phone number.

Although bypass is common in other territories in the region, Mahadeo said that he was convinced that Guyana was the territory most badly hit by this phenomenon. He made this assessment was based on the significant number of Guyanese who reside in North America, many of whom contact relatives in Guyana frequently.

In an effort to counteract the problem of bypass, Mahadeo said, the ‘Call Home Guyana’ card was launched. This, he said, is a legitimate and cheaper means by which persons overseas can call Guyana. He also said that good quality calls are also assured if these cards are used.

Additionally, Mahadeo said that the company has approached the government for assistance. Further, the local phone company has contacted US and Canada-based telephone companies and according to him, these companies are trying to address the problem as well.

However, the Chief Financial Officer emphasised that the citizens are essential in curbing the problem of bypass. He urged anyone who receives an international call from a local cell phone number, to report it to the phone company. Further, if a caller receives an overseas call of poor quality, this should be reported as well.

Meanwhile, Mahadeo said that so far whenever the company discovers illegal operators it takes appropriate actions against them. However, he said that it was not always easy to find these persons. The Chief Financial Officer emphasised that the company was very serious in addressing the problem even though certain elements of control the issue was out of its hands.
– customers urged to report irregularities

GT&T contributes $43 Billion to national treasury since 2000

July 23, Kaieteur News

The Guyana Telephone and Telegraph Company (GT&T) has invested US$300M in Guyana since the beginning of operations.
At present, the company is worth over $5B with 250,000 mobile subscribers and 130,000 wire-line consumers.
Yesterday, Kaieteur News was told that the annual book earning per share is $195,859 and that the company has 20,625 shares. Of this amount of shares, the government has 4,125.
Since 2000 the government has received more than $4.7B in dividends. Licence fee: $1.75B; Consumption Tax/Vat: $7.2B; Corporation Tax: $29.3B: and Dividends: $4.7B. All told, the telephone company has contributed a whopping $43B (US$215M) to the public treasury.
In justifying the reason for selling government shares, which have earned nothing less than $200M per year with over $800M earned in 2004, President Bharrat Jagdeo said on Monday that his intention to liberalise the telecommunications sector will lead to cheaper costs and enhanced services to customers.
He said that the liberalisation would enable greater international connectivity since studies have shown that more than 25,000 young Guyanese can be employed in the Information Communication Technology (ICT) sector.
In the deal that was struck between Atlantic Tele-Network, an 80 percent stake in the telephone company was sold for the sum of US$16M to Atlantic Tele-Network (ATN) and was guaranteed an investment return of 15 percent.
A six percent advisory fee on gross revenues and a multi-year monopoly on international calls were involved in that deal.
As a consequence the GT&T parent company has received US$80M in advisory fees since the sale.
The US$16M purchase price was recovered in two years of operations.
Meanwhile, this newspaper was told last week that the GT&T parent company has rejected the offer to buy Government’s 20 percent shares in the telephone company.
A source stated that ATN at its recent Board of Directors meeting declined to purchase the shares. Last year government collected $1.5B in taxes from the company and $265M in dividends.
The Opposition is contending that the real motive behind the selling of these shares is intended to ‘benefit the friends and supporters of the PPP’.
During a press conference two Fridays ago the PNCR called for workers of GT&T to be afforded the first option to buy the shares.
According to PNCR Vice Chairman, Basil Williams, the party would insist on this position and oppose any attempt to deny the workers of the company the right to own those shares.

Finance Minister on the sale of GOG's GT&T shares.

In the recent political debate on the sale of its shares in GT&T, the Finance Minister has made a statement that does not fit with his Finance Minister's cap - instead it is a political statement. His statement was carried in the two Government papers (Chronicle and Times).

Finance Minister is questioning the Advisory Fees paid by GT&T to ATN and labels the fees as distribution. This is coming from the finance minister who cannot put this parallel with many other companies in Guyana. Such distributions take place by the GoG using the Lotto Fund and other unaccounted-for accounts as per the Auditor General Report.

Finance Minister is also saying that the taxes and other contributions of GT&T is nothing...since any company ought to pay its taxes. The point is that if the company is forced out as is happening, then there will be NO taxes. There are many instances of poor governance and administration that can come into the argument.

At the end of the day, one cannnot understand how selling these shares has to do with the cost of bandwidth. The Government seems to prepare for riding on the back of GT&T's investment in a new cable - so that bandwidth costs will be lowered anyhow, regardless of the ultimate distribution of the shares. Fact is: the Government only need to invest ONE year's taxes paid by GT&T (17millionn USD per year) into ICT to make it a reality.

GoG agrees to debate GT&T shares

Government agreed to enter into a debate on the GT&T shares. In Kaieteur news Jul 18, Finance Minister (technocrat-turned-politician), said that Gog was willing to 'discuss' the shares.

Let the Debate begin.

That 20 per cent in GT&T

The following is Kaieteur News editorial of July 16th 2009

The decision by the Guyana Government to sell its 20 per cent share in the Guyana Telephone and Telegraph Company (GT&T) has caused some stir in the society, particularly at the level of the politicians. The economists are so far silent.
When the government made the announcement, first through the Head of the Privatisation Unit, Winston Brassington, and later through a press release, its main argument was that the company was very profitable at this time and that now was therefore the best time to sell.
But there was another side to the decision. The government said that over the years its representatives have been sitting on the board, they have failed to make the rest of the Board of Directors take their considerations aboard. In short, they felt that they were just there to make up numbers and had no influence whatsoever on the discussions or the deliberations.
One would believe that even if the representatives feel that they can in no way impact on the operations of the telephone company, at least they were being privy to the inside workings of the company; they were aware of the various decisions that would involve the use of funds.
The politicians appear to be more concerned with the money accruing from the company, which, in the words of the head of the Privatization Unit, is very profitable. Ever since 2000, the company has been paying dividends to the government. The company was bought by Atlantic Tele Network in 1991.
At the time of the sale the company was given a ten-year moratorium on dividends while it improved what was in effect an ailing communication system. The government has since announced that from the time dividends have been paid, the returns have been between US$1 million and US$4 million. Last year, the local company paid $256 million in dividends. That is about US$1.28 million.

The telephone company has been saying that the dividends could have been more if the government had clamped down on the illegal communications setup that seem to abound. Whatever the case, the politicians are of the view that given the global economic crisis it was better for the government to keep its shares in the telephone company because it would represent a source of revenue at no risk to the government.
From an economic point of view, that may be wise, but the government feels that if it gets its money in a lump sum then it could undertake much more. The politicians feel that the government has an ulterior motive.

It is now known that the GT&T parent company has no intention of buying those shares. It was known that the government had a certain price that it wanted for its shares. The head of the Privatization Unit had also caused to be stated that the government was not prepared to accept any price. The politicians are now of the view that the government priced the shares at a level that was high enough to deter the parent company from buying them and it is here that the politicians believe that the ulterior motive would be put into effect. Already, there is talk and a lot of it, that the government may be seeking to divert more of state assets to, as the PNCR said, to its cronies.
One question is, “Why should there be a problem with the government divesting itself of assets?” Former President Desmond Hoyte had once said that government should get out of business because it is not good at that. The present government seems to be doing just that. But the opposition seems not to be having any of that. Mr Robert Corbin has signaled his party’s intention to go to Parliament to seek to stop the sale of the shares.

He had also said that the shares should be sold to the workers. It would be interesting to see if the workers can pick them up for whatever price the government asks—and the apparent asking rate is US$40 million.
If indeed the asking price is US$40 million then at the present rate, the government would have collected this sum over somewhere between eight and 20 years. With devaluations and the like, this money would be worth much less than it does today. The government may be wise to sell today.
Perhaps the government should release those shares to the wider public in the same way some of the commercial banks did some years ago.

LIME, Digicel square off

Thursday, January 08, 2009

Following the first phase of liberalisation of the telecommunications sector in 2000, which effectively ended the C&W monopoly, LIME has complained of "monopolistic" behaviour (as has Claro) by Digicel, which has become the market leader in the cellular sub-sector.

LIME, which rebranded in the Caribbean from Cable & Wireless in 2008, issued a statement at about 4:00 pm yesterday claiming that Digicel had that day blocked calls from LIME customers throughout the region who were calling customers of its rival here in Jamaica.

However, in a swift response, Digicel charged that its customers had almost simultaneously began complaining that they appeared to be blocked from calling LIME landlines.

Yesterday, Office of Utilities Regulations (OUR) spokesman David Geddes said that the regulator was aware of the dispute but was awaiting detailed information from both parties regarding this most recent complaint.

"We have been aware of an ongoing dispute between LIME and Digicel since late last year," Geddes told the Observer. "The dispute centres on Digicel's interpretation of the Telecommunications Act and the OUR rendered an opinion on this which was that the OUR disagreed with Digicel's interpretation that LIME was engaged in bypass activities, and we secured an understanding from Digicel that they would not disrupt LIME traffic."

Digicel has approximately 1.9 million cellular subscribers; LIME, 660,000 and Claro, before rebranding from MiPhone in late 2008, has 220,000.

LIME said it would be filing an injunction against Digicel, claiming that both yesterday and on December 19 Digicel blocked 80-90 per cent of LIME's international circuit routes.
"LIME is of the view that Digicel is acting in an anti-competitive manner and is seeking to use its dominance to ring-fence its network," said LIME executive vice- president for carrier services, Lawrence McNaughton. "In addition,
Digicel's action directly affects LIME's revenues and its reputation with other international operators. The remit of the liberalisation of the telecommunications industry has failed if Digicel has the power to breach the law and is empowered to act as its own regulator, as it deems fit in order to circumvent the provision of lawful commercial agreements."

McNaughton added that he was unaware of Digicel calls to LIME landlines being blocked.

The accusation, however, has angered Digicel, which has called for a retraction, saying that the LIME version of events was "untrue".

"I am extremely disappointed at the outrageous claims made by LIME/Cable & Wireless today that Digicel has engaged in anti-competitive behaviour," said Digicel Group Chief Executive Officer Colm Delves. "On no occasion has Digicel ever engaged in call blocking of any kind or shown contempt for the interconnection agreements signed with LIME.

Furthermore, and as confirmed to us by the OUR this evening, Digicel is not in breach of any order issued by that office."

Who will gain when GT&T goes down?

GT&T's cable has been deliberately cut once again. Who will gain from such terrorist acts against Guyana and against the company? The Regulator literally promised to give telecommmunication license to anyone if GT&T's cable is disrupted frequently - following that satement from the Regulators, we see more such deliberate acts of cutting poles and cables by persons and parties unknown. Are these acts a deliberate ploy to bring GT&T's service down so that license can be granted to those who are seeking such? And if that is so, where does it stop?

Following this latest disruption, there has been total silence from all quarters. Regulators, Government as shareholder....no one has voiced any concern.

PNC questions Govt sale of GT&T's shares

The PNC has called for an investigation into the sale of Govt. shares in GT&T

PNC questions the rationale behind the sale by the Gov't and is suspicious of 'who' would buy the shares. PNC will be conducting its own investigation.

"The PNCR and main Opposition Leader did say that the party was going to undertake an investigation as to why the Government would want to sell a source of a revenue earner."

Sabotage of GT&T's cable

We are concerned at the spate of attacks on the cable that connects Guyana to the rest of the world. A couple of weeks ago (see blog post further down) the regulators and Government were attacking GT&T about its ongoing disruptions. Indeed, these disruptions are disgusting.

But, the significance of the disruptions is not lost on the nation! We have to question: "Who stands to gain the most from these disruptions?"

There is great concern also that neither the regulators nor the government sees it fit to investigate or condemn the sabotage.

See article here

GT&T in low carbon strategy

Link

GT&T’s Cellink subscribers have started to receive SMS texts giving pointers on Guyana’s Low Carbon Development Strategy (LCDS) and directing them to its website; joining forces with the Office of Climate Change to promote the Strategy.

According to a Government Information Agency (GINA) press release subscribers would have received texts reading “Did you know? Guyana launched its Low Carbon Development Strategy! It saves the rainforest and supports sustainable economic growth. Visit www.lcds.gov.gy”

President Bharrat Jagdeo launched the LCDS which is a draft document of Guyana’s potential approach to advancing economic growth while combating climate change on June 8.

The public can access the document and supporting information from the aforementioned website or from the GINA website located at www.gina.gov.gy

Comments to the Stabroek article:
Justice UNITED STATES says: July 1, 2009 at 6:11 am
Jagdeo need to stop flogging this dead horse. there is more to be gained from the proper management of our existing resources.

4 real GUYANA says: July 1, 2009 at 11:17 am
I don’t care about GTT’s efforts/support for the president’s ignorance (oops I mean initiative) and I am prepared to switch networks if they send that text to my phone.
Furthermore, I don’t even want to hear anything else about the LCDS, since I have not heard what it will do for the normal Guyanese, you know:

Like our teachers, nurses, etc many of whom do not make a million dollars per year after taxes;
Yet if they want a car they are expected to 2million and about for a reconditioned car, primarily because these vehicles attract 100% duties even though many of then have no less that 35000 km already on them. I guess no one taught our great economist about depreciation.

And are expected to pay as much as half or one million dollars for a 50×100 plot of land to build a house. While the state propaganda machines laud The grow more food campaign; I guess the citizens are plant in boxes.

Another president’s initiative, I guess.

I could go on……….

GT&T Hosting national squash championship 2009

GT&T is sponsoring the Senior squash championship 2009.
So far, as carried in Kaieteur News:
Top seed and defending Men’s champion Kristian Jeffrey and Nicolette Fernandes eased into the second round of the GT&T sponsored National Senior Squash Championships, after defeating their respective opponents, as action in the competition got started on Tuesday evening, at the Georgetown Club courts.
All the other top seeds advanced as well with little difficulty, except for Daina King, who was pushed to four sets by Alysa Xavier, before prevailing.
Jeffrey beat Andy Gouveia in three straight sets, while Fernandes, playing in the Men’s draw dispatched the young promising Nyron Joseph, also in straight sets.

Digicel's Summer Flex Concert - Elephant-man apologizes

Seems like our call for an apology by the elephant-man was heeded. He apologized during recent show in Guyana. "...he apologised thrice to the crowd for calling Guyanese thieves at his last performance."

Digicel with Wildfire Productions staged a sizzling concert at the National Stadium on Friday night. The show featured Elephant Man and Tanya Stephens. As usual with these shows there was a large turnout to the show as Guyanese love to have fun!

Digicel also launched its Summer Flex promotion with two new BMWs to be given away as part of its “summer promotions”.

Digicel Debt placement

New Digicel placement
Published: Wednesday | July 1, 2009

Digicel Limited (DL), an affiliate of Digicel Group Limited, on Tuesday offered up for sale an additional US$250 million of its 12% senior notes, in a private placement in New York. This will be used partly to finance future unspecificied acquisitions.
The notes mature in 2014, alongside another US$350 million already issued. The debt is guaranteed by 9 of the Irish company's subsidiaries, including Digicel Jamaica.
“We are offering an aggregate of US$160,000,000 of new notes," said DL's offer document.
Denis O'Brien, indirectly owns 95 per cent of our common shares. Denis O'Brien, who also controls 100 per cent of Digicel Group - ultimate parent of Digicel Limited - has since the company's formation in 2001 showed a marked preference for debt to finance the mobile provider, whose holdings extend across the Caribbean and into Central America.
Digicel Debts
Digicel Limited's debts, reached US$1.8 billion at March 31, 2009, or 2.68 times EBITDA of US$676.6 million. A portion of the DL debt, US$75 million, is owed to Digicel Group Limited.
Digicel Limited, a US$2.27 billion operation incorporated in Bermuda, also reported consolidated net profit of US$166 million from revenue of US$1.7 billion.
However, the company also disclosed that subsidiary Digicel Holdings Central America Limited has a big loss of US$176.6 million.
More losses coming
"We may continue to incur losses in the near future," the company said.