Guyana’s oil revenue potential for telecom infrastructure upgrades

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The only English-speaking nation in South America, Guyana has a small population which traditionally had one of the lowest GDP rates in the region. Although GDP growth had been steady in recent years, the sale of oil from offshore reserves which started in February 2020 promises to completely transform the economy.

With good stewardship, oil revenue has the potential to lead to a major overhaul of the country’s infrastructure, including the aging telecom networks.

The incumbent telco Guyana Telephone and Telegraph (GT&T, rebranded as GTT in late 2015) is controlled by the US-based Atlantic Tele-Network (ATN). The company competes with Digicel in the mobile market but retains a monopoly over fixed-line services. Although GTT’s fixed-line monopoly was renewed for 20 years in December 2010 it drew to a close following the passing of the 2016 Telecommunications Act. However, since 2017 there have been delays in negotiations between the government and GTT relating to the terms of the market liberalisation and so the monopoly has been retained in practice: GTT still claims that it enjoys a monopoly on international voice and data services until 2030. Digicel is expected to launch competing services in the fixed-line market as soon as it is able to do so. In 2019 the government signed an MoU with ATN regarding licensing terms and the benefits expected to develop from market liberalisation. However, relations between the company and government are fraught, not least in relation to tax arears amounting to some $44 million.

Fixed broadband services have improved, especially since the opening of the SG-SCS submarine cable in mid-2010, but they are still comparatively slow and expensive, and the number of broadband subscribers remains small. The submarine cable proposed by Digicel would provide a second link to international cable infrastructure in the region and would go far in reducing consumer pricing. The government’s plan to build a domestic network connecting government offices in remote and inland areas was halted by a newly elected government in 2015 and closed down in 2016, having been disastrously mismanaged. However, in the 2019 budget funds were made available to promote the use of ICTs for a range of e-government, e-health and tele-education services, as well as to build ICT hubs in remote areas affecting a number of communities.

In the mobile sector GTT’s mobile unit Cellink competes with Digicel Guyana. Both operate GSM/GPRS networks while Cellink in mid-2017 also launched a limited LTE service.

BuddeComm notes that the outbreak of the Coronavirus has had a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key developments: Sale of extracted oil begins, though hopes of a financial windfall are diluted by the crash in demand caused by the pandemic; GTT expands LTE and fibre broadband services; Digicel Guyana has microwave link with Suriname shut down; Three spectrum monitoring stations opened; Government struggles to complete end to GTT's monopoly; E-Networks signs agreement to use O3b's Fiber in the Sky satellite network; Report update includes the regulator's 2018 annual report, ITU's 2019 market data, operator data to Q3 2020, Telecom Maturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector recent market developments. Get a Full Copy of this Report Developing Telecoms market report summaries are produced in partnership with BuddeComm, the world’s largest continually updated online telecommunications research service.

The above article is a summary of the following BuddeComm report:

Report title: Guyana - Telecoms, Mobile and Broadband - Statistics and Analyses

Edition: November 2020

Lead Analyst: Henry Lancaster

Number of pages: 94

Single User PDF Licence Price: US$750

For more information or to purchase a copy of the full report please use the following link: https://www.budde.com.au/Research/Guyana-Telecoms-Mobile-and-Broadband-Statistics-and-Analyses/?r=83

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Guyana’s oil revenue potential for telecom infrastructure upgrades

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