Telecommunications liberalisation and economic growth: the Guyana scenario

In this week’s issue of the Stabreoek’s Business we publish the first Installment of what we hope will be a sustained series of articles titled Talking Points. The objective of Talking Points is to stimulate active discourse on relevant and topical issues in the development of the business community and the Guyana economy. We particularly wishes to encourage businessmen and women, umbrella business organizations, overseas investors, public sector officials, representatives of diplomatic missions responsible for trade and economic affairs, consumer affairs advocates, and students and lecturers in relevant disciplines to contribute to Talking Points.

Articles should be sent by e-mail to (attn The Business Editor) and should not normally exceed two (2) quarto sheets. Considerations of space might, on occasion, compel the Editor to ask that the length of articles be reduced.

Submissions should be accompanied by a passport sized-photograph and a brief (no more than three lines) biographical sketch of the author

By Lance Hinds

The recent dust-up over the laying of the new Telecommunications Act in Parliament highlights the critical need for wider stakeholder participation in an issue that is vital to the long-term economic growth and evolution of Guyana. The reduction of the cost of computers, the steady rise in the use of mobile devices for connectivity plus the potentially significant increase in internet usage as a result of the Government of Guyana’s One Laptop per Family (OLPF) programme targeting some 90,000 households, indicates a shifting landscape that requires some thought both in terms of policy and action. Regardless of sentiment, it is inevitable that the traditional productive sectors will not last forever in their current scope and framework. It is the technology-driven, knowledge-management industries that will have to be the cornerstone of this country’s future. The introduction of a competitive telecommunications sector therefore is fundamental to any possibility of ICT contributing significantly to our social and economic advancement.

20130125lanceIt has to be assumed that our government has long shared this perspective as well. In 2002, the president joined fellow Caricom Heads in launching the Caricom Agenda and Platform for Action. In the executive summary it states clearly that the heads:

“Recognised the potential of Information & Communication Technology (ICT) for enhancing and integrating our societies in areas such as education, health, poverty reduction, delivery of public information and governance – all objectives well articulated in the Caricom Charter of Civil Society”

Section 3 of the Agenda (Principles) states:

“The design and implementation of an agenda for connectivity must be guided by principles of equity and universality, while preserving incentives for private sector investment. Simply, all citizens must have access at a cost truly within their reach.”

The agenda goes on to stress the need to establish a modern national regulatory framework that plays a key role to support and sustain a national effort for effective connectivity, and that it should be based on principles like equitable, universal, affordable access to education; a competitive ICT industry; information protection mechanisms, and last but certainly not least, the coordination of legislation governing the information and communication sectors.

Following the adoption of the World Summit on the Information Society (WSIS) goals and objectives, in 2005 the Caricom Secretariat formed the Regional ICT Steering Committee. This committee was constituted as the primary mechanism for dealing with regional information society and ICT issues. This committee was intended to serve as a “think-tank” for the Caricom Secretariat and was a primary mechanism to manage and coordinate the advancement of ICT and the information society in the region.

All of the above clearly shows that all the governments of Caribbean Community took on the mandate of developing of ICT as a viable, cross-cutting productive sector that contributes significantly to the social and economic development of the region. The report card on this initiative is mixed at best. That however will be saved for another discussion.

20130125speedInterest connectivity in Guyana is among the lowest in the Caribbean in terms of capacity. The following table illustrates the level of internet connectivity provided by some Caribbean nations with smaller economies.

The local service barely reaches the 1 or 1.5 Mbits/sec as advertised. (The countries highlighted were selected for comparison because any mention of Barbados, Trinidad & Tobago or Jamaica triggers a response about economies of scale) The Guyana Telephone and Telegraph Co (GT&T) provides both a residential and business service. The business service is supposed to provide access speeds of 1.5 Mbit/sec.  Experience on a daily basis reveals, however, that there is very little difference between the two in terms of capacity. A measurement of the actual throughput of this service on many days is truly cause for some irritation. The fact that the company advises customers on its FAQ page that a web server can be used on its business service is cause for some wry amusement. The bandwidth for incoming requests to a web server, as some local businesses can attest to with some frustration if not anger, is simply not up to par.

20130125USDThere is also the issue of cost of connectivity. There is an opinion that this cost, in view of the quality and scope of service, is expensive. Again, a review of the pricing in some parts of the region is also very instructive:

As illustrated in the table above, the basic startup service (2Mbits/sec) in most cases cost more than US$10 less than what is provided locally. The business community in Guyana is also asked to pay $30,000 (US$150) for the business service. This is based on an argument that an office would have a higher utilisation as a result of networked computers and related devices. This logic however does not hold because for the additional cost, the capacity of the business service is not significantly better than the high speed residential services and quite frankly in many areas it is the same. It should also be noted that in the countries previously mentioned, internet speeds up to 12Mbit/sec are available below the price paid here for the business service.

Attempting to provide enterprise services, such as Business Process Outsourcing, off-shore software development and related data services for overseas clients is also a challenge. The charges for dedicated bandwidth average a whopping US$3,000 per Megabit.

There is an overall concern that the prices for dedicated bandwidth in the region are generally high but this by all accounts is extremely uncompetitive and in the opinion of some, outrageous. The one constant in all the countries used for comparison is that telecommunications providers operate in an environment where the prices are determined by the market forces combined with well thought out enabling legislation and policy. It is imperative that Guyana joins with its Caribbean brethren in the interest of long-term progress.

It is regrettable that this country’s potential is held hostage by this state of affairs and stifled by an anachronistic telecommunications environment that simply has no place in the development of an information society. As the opening statement of the Terms of Reference of the Caricom Regional ICT Steering Committee states most appropriately:

“The Caricom Region is faced with a growing digital divide and the need to improve efficiency and marketability in all sectors if it is to compete globally.  The strategic application and use of Information and Communication Technologies (ICT) is one of the vehicles to economic and social stability.”

We all have a responsibility to ensure that this legislation moves forward.

The writer is the Chief Executive of the BrainStreet Group, an Information Technology and Content Development Company. He is also a member of the Caricom Regional ICT Steering Committee.

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