The Guyana Consumers Association (GCA) is calling for a Forensic Audit of Guyana Telephone and telegraph Company’s (GTT’s) accounts so as to break the deadlocks which have arisen between the Public Utilities Commission (PUC) and GTT over the years in relation to its landline service.
In a 10-page Memorandum to the Chairman of the PUC responding to GTT’s filing dated 17 November, 2016 for the increase of its landline rates, the Association noted that “the Government of Guyana has now made the execution of Forensic Audits a policy for entities whose accounts and activities are not transparent or are questionable or inexplicable or opaque (and) we would ask the PUC to quickly commission a Forensic Audit of GTT’s accounts,” noting that understanding of the company’s operations could only be achieved by a forensic audit.
According to the Consumers Association, GTT’s claim for special profits for a segment of their activities, that is the landline, is not justifiable and should be dismissed. The reason given is; the company’s contract with the Government calculates its profit on assets and attempts to calculate on segments vary the contract. It was noted also that all segment rates/ costs have a direct relationship to other areas of the business.
Explaining its case, the Association alluded to the fact that consumer pays the 15% rate of return on landline assets which are old and depreciated while profits raked in from the usage of fibre optic and the copper lines belonging to the landline for the transmission of mobile and internet traffic (which allegedly makes US$2M per annum) are not credited to the landline.
The GCA called for internet service to be regulated by the PUC since the internet is delivered to the consumer via the same landline. It also called for monies from the undersea cable, an asset costing over US$30M financed partly by landline funds, to be paid to the landline revenues.
This recent demand for increased rates the body said is “spurious” since, for 26 years, the Guyanese consumers have funded all investments by GTT within and outside of Guyana.
The telecommunications company presented 10 reasons to increase landline rates. The company claimed that its rates have not changed in 15 years, however, in its statement, the GCA noted that GTT contractual expansion of 10,000 customers per year ought to have provided increased revenues with straight-line cost.
In this regard, it blasted the company for not responding in a timely manner to landline customers, not engaging in ways to promote its landline service and failing to utilize the available technology to improve the service.
“GTT does not repair consumers telephone in good time, sometimes for months. People are therefore forced to buy cell phones. More importantly, thousands of people have applied for landline phones but GTT does not ever supply them… The way of testing the truth of the landline market is for GTT to prominently advertise in the press and on TV that (i) they would be able to supply all applicants for landlines within two weeks or a month; (ii) they would repair customers’ phones with immediacy. If GTT does this, this would be the first time in 10 years they would be marketing the landlines” the GCA outlined.
In its argument, GTT also claims that all local purchases realized a 90% increase due to inflation. However, the GCA reminded that while the number is “absurd”, it enjoys a guaranteed profit of 15% or more, an Advisory fee of 6% of gross takings equivalent to approximately another 12% profit as well as tax benefits on imports.
“Any increase in local rates to “make up” for a drop in international revenues will be tantamount to penalizing Guyanese consumers for an inefficient strategy of an ineffective GTT,” the GCA said.
Finally, in relation to reducing international rates, it was noted that despite claims, GTT in its filing of November 17, 2016. made no application for reduction of any international rate. It was also disclosed by the GCA that “Code 152 which permitted international rates to be reduced for calls made after 10:00pm, was discontinued by GTT so as to increase rates.”’
