Telecoms liberalisation in govt’s court- GTT’s CEO ; US$5 million set aside for tax dispute

Last Updated on Tuesday, 21 August 2018, 22:32 by Denis Chabrol

The Guyana Telephone and Telegraph (GT&T) on Tuesday said it was ready to end its contractual monopoly on international voice and data, a move it hoped would end the discriminatory corporate tax law that sees it paying 45 percent and competitors 17.5 percent less.

“What liberalisation will do, in my belief, is level the playing field where we all either pay 45 percent taxes and adhere by the same regulatory rules,” GTT’s Chief Executive Officer, Justin Nedd told reporters.

Public Telecommunications Minister, Cathy Hughes has in the past offered several missed deadlines for  telecoms liberalisation.

He declined to say what are the stumbling blocks in the negotiations, but said company and government representatives last met in December 2016. Since then- as late as last week- he said he telecoms company has been providing government with documents to help it decide on removing the paper monopoly. “The last sit down we had with the government a few years ago was productive. We have since exchanged a number of documents and paper so we’re ready and in fact, with our great relationship with the Ministry of Public Telecommunications, I think it we’re closer than ever,’ he said in response to a question by Demerara Waves Online News.

At the same time, he could not give a time-frame within which he expected formal liberalisation of Guyana’s telecommunications sector, saying that depended on government. Dedicated teams, he said, have been dispatching the documents and “proposals” to government. Nedd confirmed that GTT and the Guyana Revenue Authority were still talking about US$44.1 million  tax demand for deductions of intercompany advisory fees and other tax assessments dating back to 1991.

In its second quarter (June 30, 2018) report to the United States Securities and Exchange Commission, ATN said US$5 million have been set aside at the end of the reporting period to cater for an “adverse outcome” of the GRA’s demand.

“The Company maintains that any liability GT&T might be found to have with respect to the disputed tax assessments, totaling $44.1 million, would be offset in part by the amounts necessary to ensure that GT&T’s return on investment was no less than 15% per annum for the relevant periods,”  the report states.

In that report to the SEC , GTT’s parent company, Atlantic Tele-Network, said talks were held in January 2018 to discuss modifications of the company’s exclusivity rights and other rights under its existing agreement and license.

However, ATN said it was unsure if those ongoing talks would end before the Guyana government issues new licenses contemplated by the legislation or at all, or that such discussions will satisfactorily address the company’s contractual exclusivity rights.

“Although the Company believes that it would be entitled to damages or other compensation for any involuntary termination of its contractual exclusivity rights, it cannot guarantee that the Company would prevail in a proceeding to enforce its rights or that its actions would effectively halt any unilateral action by the Government,” ATN said in its report.

Meanwhile, Nedd said GTT was pushing ahead with it improving the quality of its increasingly Internet-driven customer service experience and rolling out its fiber optic high speed data services to businesses and homes. Boasting that GTT provides 93 percent cheaper internet service compared to competitors who pay a 15.7 percent corporate tax, he said the three fibre optic cables that serve Guyana provide sufficient redundancy. “It shows that our network is resilient and it is quite capable of serving the populace,” he said.

Since the provision of improved Internet service to Guyanese , the CEO said Internet traffic has grown by more than 13 percent with a lot of visitors going to Google, Netflix, and Facebook.

So far more than 6,000 homes and are now hooked up to GTT’s Internet for the first time and 4,000 other applications are on the waiting list. The company says it connecting 120 Internet subscribers daily.

GTT says it has invested more than US$20 million in delivering Internet by fibre-optic cable to homes and residences.