World Dialogue on Regulation

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Disponible en español e inglés

This study considers Guyana’s telecom sector and the regulatory framework, the conditions within which service providers operate, assesses the TRE and its impact on the level of investment, and makes recommendations for future studies. As a complement to the study, a brief overview of the Caribbean environment is included in an appendix, thus affording a regional perspective as it relates to issues such as government telecom and/or ICT investment.

The study focuses on the period following the privatisation of the government owned and controlled Guyana Telecommunications Corporation (GTC) and the establishment of the Guyana Telephone and Telegraph Company (GT&T). The newly privatised company was given a 20-year monopoly – excluding the mobile sector – with the option of renewal for a further 20 years. To-date, GT&T remains the dominant service provider alongside two functioning mobile service providers. Not surprisingly, the privatisation of GTC was complemented by the establishment of the Guyana Public Utilities Commission (PUC), a government agency responsible for the regulation of all public utilities. In addition to the PUC, the regulatory environment also consists of the National Frequency Management Unit (NFMU), and telecom law provides for the office of the Director of Telecommunications, an office that has never been occupied.

In an effort to strive for objectivity in the TRE assessment, the opinions of 15 knowledgeable persons (stakeholders), were sought via questionnaire, however only seven responded. Respondents were asked to rank the different dimensions of the regulatory environment (as detailed in the WTO Basic Telecommunications Reference Paper). The overall assessment for the fixed and mobile sectors was ranked as unsatisfactory; however, the assessment indicates that the mobile sector has a relatively better TRE. The average assessment for each dimension and sector, for the most part, closely mirrors the informed opinion of the author. However, a higher response rate would have certainly bolstered the findings.

The two issues of universal service and tariff regulation, considered for the fixed sector are interdependent. In other words, while the government blamed GT&T for reneging on its expansion plans, GT&T in turn accused the government (PUC) of not allowing it to charge feasible rates that would ensure its 15% guaranteed rate of return and enable the company to carry out its expansion plans. This segment of the telecom sector was thus plagued with numerous and prolonged court battles, signalling the unsatisfactory perception of the TRE and the ineffectiveness of the PUC.

The main issue of concern in the mobile sector’s TRE is interconnection. Given the nascent stage of the liberalisation of the mobile sector, it is not surprising that this is the central issue. The average assessments for this dimension are unsatisfactory (for both periods of observation – 1996-2000 and 2001-present). There is a lack of clear and detailed rules regarding regulation and this has led to disputes between the incumbent and start-up companies. A further potentially troubling issue is that of spectrum allocation. Admittedly, there is no real scarcity of spectrum in Guyana, in fact supply is larger than demand for most bands. However, problems may arise concerning spectrum allocation when the sector becomes more competitive.

The study concludes by highlighting the fundamental problems plaguing Guyana’s TRE, such as inconsistencies between the PUC and Telecommunications Acts and the GT&T license and Purchase Agreement and GT&T’s dominance of the sector, in an age when telecom sectors around the world are moving towards increased competition. To correct these fundamental problems the need for comprehensive reform of the telecom sector, especially the regulatory framework is reiterated, in addition addressing concerns regarding GT&T’s goodwill and the early end of its monopoly. In terms of TRE impact on investment, the study concludes that while an unsatisfactory TRE certainly adds to the uncertainty of investing, an improved TRE might not necessarily result in a significant increase in investment unless firms have the financial wherewithal to do so. Additionally, the size of the population – less than a million – and the general macroeconomic and business climate are essential factors in the equation. In other words, an improved TRE is a necessary but not a sufficient condition for a significant increase in telecom investment in Guyana.