A short discourse on some of the drawbacks of having an exclusive monopoly and some benefits of inviting competition in a telecoms sector


Those who are regular readers of ICT Pulse, and our news roundup in particular, would be aware that over the past few years, Guyana has been eager to liberalise its telecoms sector. Currently, only the mobile/cellular and local Internet Service Provision (ISP) markets have competition. Other key segments, such as fixed telephony and international voice and data transmission, are controlled by the incumbent carrier, the Guyana Telephone and Telegraph (GTT) (Source: TeleGeography).

For a broad range of reasons that  included legal challenges and a change of government, the promulgation of Guyana’s new Telecommunications Act, which would facilitate the liberalisation process, the introduction of competition and a suitable regulatory framework, has been a highly protracted process over several years. However, with the Act now passed, the Government of Guyana appears to be moving with some alacrity to negotiate with the GTT for the end of the latter’s exclusive licensing arrangement – as there are several disadvantages that can be overcome and benefits that can be realised (some of which are outlined below) in having a more competitive environment.

Telecoms sector is underdeveloped

Unlike most Caribbean countries, which moved from exclusive monopolies to inviting competition in their telecoms sector in the early to mid-2000s, Guyana is just beginning that process. It therefore means that in comparison to other countries across the region, its sector is underdeveloped, as the legal and regulatory frameworks to properly support competition – including the issuance of new licences and the introduction of the latest technologies – have been delayed. For example, and according to TeleGeography, Guyana “is one of the fewer than ten nations [globally] that still do not have access to 3G or 4G technologies. Others on that list include Tuvalu, Eritrea, Palestinian Territory, Cuba (a 3G platform is available, but only to roaming visitors), St Pierre & Miquelon and Wallis & Fortuna”.

Limited choice for consumers

Following from the underdevelopment of its telecoms sector, and the lack of competition in critical market segments, such as fixed-line and broadband Internet, invariably, Guyana’s citizens would have limited choice, in terms of service providers and the service plans and packages that are available. Although it can be argued that ISP in Guyana is competitive, as there are multiple players, all of them are resellers of the GTT’s service, having purchased Internet capacity from the GTT, and with the GTT having an exclusive monopoly on international data transmissions. As a result, current licensees do not have much control over, among other things,the quality of the services they offering, the technologies that are being used to provide the service, or the prices they can charge, all of which consumers will experience.

Latest best practices can be adopted

In now making plans to establish a more competitive telecoms sector, Guyana can benefit from the experience of its sister Caribbean countries and essentially leapfrog into the most current telecoms environment. In other words, it can streamline its transition process by adopting the latest trends and best practice, and requiring adoption of the latest technologies, thus bypassing earlier stages. Hence, within the next two to three years, the gap between Guyana’s telecoms sector and those in its sister countries could be considerably narrowed, and potentially, may even become indistinguishable.

A broad range of opportunities await

Finally, and unlike other Caribbean countries that have had competitive telecoms sectors for some time, Guyana is likely to be attractive to prospective investors, since its sector is still underdeveloped. As a result, there should still be some lucrative greenfield opportunities, which will allow new players to secure a decent market share, and more importantly, a reasonable return on their investment.

 

Image credit:  Pexel

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