Cellular operators in Guyana can from February 16 fix rates as low as $7 per minute and as high as $32 per minute, according to their various plans, an order from the Public Utilities Commission (PUC) said.
The PUC order, issued on Monday, has fixed floor and ceiling rates for the cellular services offered by U-Mobile and Guyana Telephone and Telegraph (GT&T) and has stipulated per second billing, all of which will come into effect on February 16.
According to the order, the floor rate will be $7 per minute, while the ceiling rate will be $32 per minute with the off-peak ceiling rate being not less than 12 per cent of the peak ceiling rate.
The PUC said that based on feedback it receives from all relevant parties, the rates could be adjusted.
According to the order, the utilities must now submit monthly information, including the number of subscribers and details of any packages, plans or group rates, in order that the commission may assess the impact of these new rates.
The information must be submitted within 45 days after the end of each calendar month.
Each company is also directed to make public the new rates for the guidance of consumers and the general public and to give “due and adequate public notification on all matters related to this order.”
According to the Order, the utility companies offering cellular services are at liberty to offer such packages, plans or group rates as the consumer may require, or which they think appropriate in all the circumstances. “But for clarification or guidance we wish, with respect, to explain as follows: Both GT&T and U-Mobile (Cellular) Inc. have prepaid plans offered to consumers. One of these plans calls for a deposit of $1,800 per minute for 50 minutes. In effect it means that a consumer who purchases such a plan will get 50 “free” minutes. This translates to $36 per minute. In view of our order the companies will have to so configure their various plans etc that the price per minute does not exceed the ceiling fixed in this order,” it stated.
According to the document, the question of billing for calls per minute arose during the deliberation and neither GT&T nor U-Mobile offered any objection. “We accordingly order that the utility companies implement a per second billing, that is to say the minimum unit of time for billing purposes shall be one second instead of one minute as at present,” the order stated.
The PUC took into account that these rates have effectively reduced the cost to the consumer but it is expected that there will be an increase in the number of calls to offset whatever reduction in income there may appear to be at first blush.
The PUC said it considered the rates fixed to be reasonable and just, having looked at the existing rates. It said the ceiling and floor rates now fixed took into consideration all the previous fixed ceiling and floor rates and it is left to the utilities to set their charges within these specific ranges.
“For the purpose of clarification the peak periods are between 6 am and 6 pm Mondays to Fridays, and the off-peak periods are 6 pm to 6 am Mondays to Fridays, and all day Saturdays, Sundays, and public holidays. These periods shall remain,” the PUC said.
On March 29, 2001, the PUC had fixed rates for GT&T’s cellular services, prepaid cards and other services and these were in effect for four plans: A, B, C and D. The PUC had also set rates for peak and off-peak periods.
“As time progressed, we noted that both utility companies had voluminous increases in consumer participation in their respective services and because of the different and divergent services which each has provided and will provide in the future, we expect competition between them, and we are supporting such competition which will accrue to the advantage of the consumers,” the PUC said.
The PUC said it had studied the market and is of the belief that rates must be fixed on which companies can live and at the same time give each a free hand to determine the best option for the consumer.
Under the provisions of Section 24 of the Public Utilities Commission Act, No. 10 of 1999, the PUC initiated and conducted an investigation into the matter and canvassed the view of the utility companies, the consumer groups and members of the public.
The utility companies welcomed the idea and felt that floor and ceiling rates should be fixed by the commission. It means, in effect, that once floor and ceiling rates are fixed neither utility may charge rates below the floor level or above the ceiling rate. “It means that each company will be free to charge what it wants within a specified price range,” the PUC said.
It said that one consumer body vehemently protested any move by the commission to set rates, and opined that the establishment of a minimum rate is an anti-competition practice which will militate against the interest of consumers.
The PUC said that once floor and ceiling rates are set for the mobile sector “we will have to ensure that GT&T have full, separate accounting for its mobile service and that there is no cross-subsidisation from or to its landline operations.”
It said international business should be accounted for in the books of the landline operations as these are services in which GT&T enjoys a monopoly. “We will also consider the quality of services provided by the mobile operators. Would consumers be interested to pay a low price for poor service?” the PUC asked.
The PUC opined that if a floor rate was not set, companies may seek to reduce tariffs to a point where they would not be economically viable. “They may be tempted to gain market share and reduce prices to shut out any competitor and then seek to increase the rates to the consumer when there will be no competition,” the PUC said.
As they stand now, rates for GT&T are: post-paid – Plan D $17 (lowest) and Plan A $32 (highest); off-peak hours the rates are between $14 (Plan D) and $27 (Plan A); prepaid rates are between $29 and $37 per minute. There is also an airtime charge for a call from a fixed line to a mobile cellular customer at a flat rate of $10 per minute regardless of time of day.
For U-Mobile, post paid rates effectively vary between $15 (Package E) and $38 (Package B). The off-peak rates vary between $22 (Package C) and $30 (Package B). The prepaid rates are set out in three separate voucher values of $40, $38 and $36 per minute, with an average being $38 per minute.
The PUC said that it requested information of one of the companies and this wasn’t forthcoming. “This information requested was central for a determination of fixing the rates consistent with our responsibility to the utilities and to the consumers,” the PUC said. The PUC added that in the circumstances “we were left with no alternative but to fix the rates on the information available to us within our data-base
