BILLIONS LOST –vandalism, illegal international bypass continue to bleed GTT

VANDALISM and illegal international bypass remain the two most critical issues affecting the Guyana Telephone Telegraph Company (GTT). The company spends more than USD $150,000 on materials and labour every year as a result of vandalism. Chief Executive Officer (CEO) Justin Nedd told the Guyana Chronicle that the authorities need to enforce strict penalties on vandals as they have been bleeding the company of revenues which could have been more meaningfully invested.
According to reports, persons who benefit from the scrap metal trade have repeatedly damaged the company’s cables in a bid to retrieve metal for sale.
The latest act of vandalism was on Friday in South Ruimveldt, Georgetown.

Mr. Justin Nedd, CEO of GT&T
Mr. Justin Nedd, CEO of GTT

Vandalism of the company’s cables results in the disruption of service to many customers. In some instances hundreds of customers. Nedd is hopeful that with strict penalties, the company can used the money spent to repair vandalised cables, in other areas that will benefit the public.
“The problem with that is that the customers are frustrated because somebody cut the lines, the company stands the cost of repairing those vandalised cables,” he told Guyana Chronicle.
“Let’s say it is US$200,000, think about that in the context of how many cell phones we have to sell, or how many months of data plan we have to sell to just cater to vandalism. What we would actually like is some more enforcement of the scrap metal trade and swift prosecution of perpetrators of these acts.”
While noting that the police have been “very responsive and supportive” to the company, he does not feel that “there is much of a deterrent because it [scrap metal trade] is still lucrative.”
Though the cost for copper has been “depressed over the last year”, there still remains a high incidence of vandalism.
“If we consider US$200,000 and a data plan is $10, we need 20,000 monthly data plans to just cover the cost of that vandalism. I could tell you 20,000 monthly data plans is a lot to get. That is months and months of data plan subscriptions at the current rate that we go.”
He explained that vandalism hurts not only the company but the public due to the inconvenience.
“It also hurts the public coffers because that US $200,000 is an expense which really deducts from our net income.”
The GTT’s CEO said he would like to see much more activity from all stakeholders to mitigate the risk of vandalism.
“When you have an expense that really reduces… revenue, less expenses then you pay taxes on the remainder; the higher the expense is the less taxes you pay; the less tax you pay, the less could be invested in the country,” he told the Guyana Chronicle.
Nedd explained that telecommunications is not a business that is “super dynamic” and in fact, it is “very slow and steady action” based on building blocks.
ILLEGAL BYPASS
The company also loses millions of dollars every year as a result of international illegal bypass.
The decline in revenue on international calls is another of the company’s major problems as the bypass industry benefits from millions of dollars in revenue which ought to be revenue gained by the company.
Nedd explained that the bypass system is as a result of outbound calls that are facilitated by Internet cafes that allow inward calls.
“This really hurts us. There are operators of various sizes that don’t have a licence to terminate international traffic,” he told this publication. According to the GTT boss, the issue of illegal international bypass has been raised by the company on many occasions and in many different arenas, but to no avail.
“You might think when you do an outgoing call that is how the company is paid but with an outgoing call we actually have to pay ATT or Sprint. We are paid on the incoming leg. So what people have done or players have done is totally brought traffic into the country over the Internet. When they bring it over the Internet, we don’t see any of that in our revenue; the Government doesn’t see any of that.”
The CEO noted that GTT only receives revenue from the local call. “You would see a GTT or the other network’s number but the revenue from that on average is about 5 cents US. If it had gone on the proper route that revenue would have been about 18-20 cents US. So for every minute that goes on bypass the government loses, 18 less, 5 that is revenue foregone,” he explained.
STATE LOSING
The money lost through international bypass does not go into the public coffers. “You have no idea how lucrative this business is,” told the Guyana Chronicle.
“We estimate that the Government loses about at least US$5 to US$6M a year on bypass. So if the Government loses that much, GTT loses that much. To us we see it as a big problem but I am not sure all the stakeholders understand how large a problem it is,” Nedd contends.
A passionate Nedd said the money lost due to international bypass can be used to develop Guyana.
“That’s a lot of money, US$5M, that’s GY$1B … four years of that and you could build yourself another bridge (Berbice River) …and that’s what’s going into somebody’s pocket… not us and not the Government.”
He explained that together, the issues of vandalism and international bypass continue affect the company’s ability to do more.
The GTT CEO strongly believes that the enforcement of penalties against wrong doers must become a priority.
“These issues are not peculiar to Guyana but where I think we fall down is the enforcement part. For instance, in other countries when people vandalise cables, they are actually caught, jailed and punished and they are exposed. In the case of bypass, that is seen as a serious, serious crime… it is fraud against the people. People are jailed for several years for that but in Guyana not at all.”
Small operators can earn as much as US$150,000 a month while large operators benefit significantly more. “It is very lucrative. There is great incentive to do it, and there is no risk to do it… no penalties.”
Nedd said in other jurisdictions, such activities would not be tolerated.
“How long will we accept this… if this was all on the up and up, the people of Guyana would have $25M more to spend on whatever they want to spend it on…you know much roads, infrastructure, schools you could build with that… you could give everybody a computer but nobody is doing anything about it.”
The CEO added: “My heart bleeds because there is so much the country could do and there is so much that could be done for the country, but all that money is just leaked into the pockets of a small number of people and everybody else suffers.”

By Ariana Gordon

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