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PUC grants GTT conditional approval for fixed line price hike

21 Jun 2017

Fixed line monopolist Guyana Telephone and Telegraph Company (GTT) has received temporary approval from sector watchdog the Public Utilities Commission (PUC) to increase rates for basic services, subject to the operator meeting certain rollout and quality of service (QoS) improvement works. The rate increases will come into effect from 1 August, but are conditional on the following: GTT must complete the deployment and commercial launch of FTTx services in La Grange; GTT must submit quarterly reports providing detailed appraisal of its progress regarding fixed line rollout, which should be no less than 1,000 lines per quarter, up to 25% of which may be re-issues; and regarding fault-reporting, GTT must provide the regulator with a quarterly report detailing the average time taken to resolve customers’ complaints.

In terms of the price increases, rates for intra-exchange calls will be increased by 33% – from GYD0.6 to GYD0.8 (USD0.0028 to USD0.0037) during peak times and GYD0.3 to GYD0.4 during off-peak hours – whilst inter-exchange calls will increase by 10%. Installation costs, meanwhile, will rise from GYD500 for residential customers and GYD1,500 for business users to GYD2,000 and GYD4,000 respectively. Monthly subscription rates are set to rise by 50%, from GYD500 to GYD750 for a basic residential plan, and from GYD1,500 to GYD2,250 for the equivalent business subscription. Fixed VAS are also set to increase in cost, with many previously free services, such as call forwarding, to become paid-for services.

In explaining its decision, PUC noted that under a 1990 agreement between the GTT’s parent company Atlantic Tele-Network (ATN) and the government of Guyana, GTT is entitled to a 15% rate of return on capital dedicated to public use, on the condition of providing universal telephony services. Since the introduction of competition in the wireless segment, however, GTT’s overall rate of return has dipped below the 15% threshold, leading it to apply to the PUC in 2014 to increase rates in the fixed sector. The regulator initially refused the increase, on the basis that GTT had failed to hold up its end of the agreement, noting that there are more than 19,000 outstanding applications for land lines. Following a recent hearing, though, the two parties have now reached something of a compromise, with GTT acknowledging that it has failed to meet its licence obligations and that it now needs assistance as, according to the PUC: ‘enough was not done by [GTT] to retain the position of strength and to try to expand their consumer base.’ For its part, the regulator recognised that in order to improve QoS for customers, additional resources will need to be made available for such investment: ‘As acknowledged by GTT its reduction in profitability could have been due to a great extent by the entity not meeting the challenges of robust competitive activities, and it is expected that the increases granted herein will motivate the company to accelerate its landline expansion programme and provide quality service to all consumers as we approach the emerging liberalised market.’

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