TELECOM UPDATE--WAR OF WORDS ESCALATES BETWEEN GT&T

UNCLAS GEORGETOWN 000219

SIPDIS

SIPDIS

E.O. 12598: N/A
TAGS: ECON EINV ECPS EINT PGOV GY
SUBJECT: TELECOM UPDATE--WAR OF WORDS ESCALATES BETWEEN GT&T
AND GOG

Ref. GEORGETOWN 174


1. SUMMARY: In a rare move to take his case straight to the
media, Guyana Telephone and Telegraph (GT&T) CEO Major
General (ret.) Joe Singh condemned the GOG's recent
"propaganda blitz" as an effort to disparage the company and
justify abrogating the firm's exclusive right agreement in
landline telephony. The GOG countered with a release
accusing the U.S.-owned company of a "campaign of deception"
that has blocked growth of the telecom sector and abused its
monopoly status while providing poor service. Both sides in
the long-simmering dispute are now taking their case to the
public, and near-term resolution is highly unlikely. END
SUMMARY.


2. Singh held the press conference March 2 to brief the
media on GT&T's plans and obstacles facing the company
following President Jagdeo's latest call for an end to the
telephone monopoly the previous week. The CEO also
reiterated GT&T owner Atlantic Tele-Network (ATN)'s
willingness to negotiate the exclusivity terms of its
license and called on the GOG to produce a Memorandum of
Understanding as a catalyst for discussions that have been
stalled since 2002. Singh also criticized the GOG for
failing to take action against unlicensed operators, some of
whom service government agencies in spite of the 1991
agreement giving GT&T exclusive rights to provide
telecommunications service in Guyana.


3. Singh also alleged that GT&T's portion of the Americas II
fiber optic cable was deliberately sabotaged twice in a 24-
hour period in early February. The company has invested US$1
million in satellite redundancy to compensate for such
interruptions, though this provides only 25% of the capacity
of the fiber optic cable.


4. In the GOG's response, Information Liaison to the
President, Robert Persaud, accused GT&T of attempting to
extend its monopoly to internet and fixed wireless local
telephone service, although such services were not available
at the time of the 1991 agreement. Persaud also accused the
company of undermining investment in the telecom industry,
specifically citing the unreliability of the Americas II
cable and the need for costly investments in less efficient
satellite redundancy as obstacles to the establishments of
call centers in Guyana.


5. In a related matter, the Public Utilities Commission
ordered GT&T to cease sales of cellular service on February
24, citing network congestion and complaints of unreliable
service. Singh has countered that GT&T cannot comply with
the request until service quality standards are established.
NOTE: The congestion issue dates back to the National
Frequency Management Unit's (NFMU) December 2004 decision to
further divide the GSM 900 MHz spectrum from two bands
(originally awarded to GT&T and U.S.-owned CelStar Guyana)
to four bands by March 21, 2006 in order to accommodate
future market entrants. As reported in reftel, the GOG has
announced it will award a cellular license to wireless
provider Digicel. GT&T is currently in negotiations with the
NFMU to modify the division to allow 33 percent for each
provider. END NOTE.

BULLEN