GTT gets OK for higher landline rates, overseas calls to be cheaper
-regulatory body sets conditions
Three years after the original application, the Public Utilities Commission (PUC) has granted the Guyana Telephone and Telegraph Company (GTT) temporary approval to raise domestic rates for some of its services. The approved rates are subject to GTT fulfilling several conditions of improved service.
With effect from August 1, 2017 all intra-exchange calls will be charged at a rate which is 33% more than the current charge while inter-exchange rates will increase by 10%. Charges for the installation of landline services will also increase from $500 to $2,000 for residential lines and from $1,500 to $4,000 for business lines.
Further, increases will be implemented in monthly rental charges for residential and business lines while a reduction of the rates for international calls has also been approved. According to the PUC from July 1, 2017 all international calls shall be billed on a per second basis.
In June 2014, GTT had applied to the PUC to increase the rates applied to services, such as installations, transfers, additional jacks, wake-up calls, 3-way calling, voicemail, call forwarding and reconnection, intra exchange calls and interexchange calls.
After the PUC initially dismissed this application in March 2015, the company had appealed the decision and the matter was taken to the Guyana Court of Appeal for adjudication
However, the company decided to reopen talks with the commission in November 2016 to have the landline service’s rates increased, pointing out that rates had not been increased in 15 years and they were losing much needed revenue since persons were more reliant on their cellular phones.
In an order dated June 9, 2017 the PUC approved the request but noted that any increase in landline tariffs must lead to an expanded and improved quality of service.
The Commission maintains that it expects that resources must be made available to this segment of the company’s operations so that consumers benefit from an improved quality of service and the company a better public image. Consequently, the increased rates are temporary rates subject to three conditions of improved service.
The conditions include the completion of the end-to-end provisioning of the FTTX Phase 1 in La Grange, and the commencement of the commercial launch of services in the areas previously identified. The company is also required to submit quarterly detailed appraisal of progress showing the number of new services rolled out, inclusive of rural areas.
“This should not be less than 1000 lines per quarter; which may include up to 25% re-issued lines,” the PUC states.
Finally the Commission having found that GTT has been tardy in their response time and remedial actions with respect to fault reporting requested a quarterly report from the date the rates take effect showing details of the average time taken to resolve consumers’ complaints - residential and business.
The company is also required to determine a daily compensatory credit for consumers where it has failed to comply.
“We wish to reiterate that our order will be for temporary rates, and we will monitor the services continuously to ensure that the company improves the quality of service offered to the public. The Company must demonstrate that there is an urgent and genuine effort to provide services to outstanding applicants. Such installation must be executed in an orderly and systematic manner,” the commission stressed.
The new rates include an intraexchange call rate of $.80 (peak) and $.40 (non-peak). For inter-exchange calls (calls from one zone to another), rates for peak hours, per minute are Zone A – $3.30, B – $4.40 and C – $5.50. During non-peak hours the rates are $2.20, $3.30 and $4.40 respectively.
GTT had based its submission on its June 18, 1990 licensing agreement, under which it is entitled to “a minimum of 15% return” on capital dedicated to public use. GT&T claimed that it suffered a $738 million deficit and needed the increases to maintain its 15%. It had argued that even with the rate changes, Guyana’s rates would still have remained among the lowest in the region.
However, in reaching its original decision the PUC pointed out that while GTT was seeking to invoke the agreement to support its claim, it had failed to fulfil its obligations to provide a universal landline service under the same agreement. The Commission noted that the agreement stipulated that “[GTT will] establish facilities permitting telephone service along the entire coast from Crabwood Creek to Suddie and in interior locations within three years” but over two decades later “many persons are not the recipients of telephone service.”
In the 2017 order the PUC acknowledged that GTT’s earnings in the recent past are below the 15% threshold on capital dedicated to public use, and that the company’s Public Switch Telephone Network (PSTN) continues to deteriorate and has become a source of disquiet amongst consumers.
They however stressed that prior to the arrival of Digicel in 2007 figures submitted have shown that GTT was earning in excess of 20%.
“Digicel is involved in the cellular services and currently has a mobile market share greater than GTT since they have attracted very many of GTT’s consumers. GTT sought to explain that the loss of market share has resulted in insufficient sums to adequately deal with the landline service,” the order states before noting that GTT has acknowledged that its reduction in profitability could have to a great extent been due to them not meeting the
challenges of robust competitive activities”, the Order said. The PUC noted that statistics from GTT show that there are over 19,000 outstanding applications for land lines and expressed the expectation that the increases granted will motivate the company to accelerate its landline expansion programme and provide quality service to all consumers as Guyana approaches the emerging liberalized market. Other services whose rates have been increased include transfers, additional jacks, wake-up call, 3-way calling, voicemail, call forwarding and reconnection.