Sunday, July 26, 2009

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.