Company Trend Analysis - Broadband To Outperform Following Liberalisation - AUG 2017

BMI View: The b roadband segment will be the main beneficiary of wireline market liberalisation . While the process is particularly focused on dismantling GTT ' s monopoly in wireline voice, that market is unlikely to see much organic growth, as outside players are expected to invest in more lucrative broadband opportunities .

The Guyanese government's negotiations with incumbent Guyana Telephone and Telegraph Company (GTT, majority-owned by Atlantic Tele-Network) on ending its monopoly in the wireline segment are progressing, but are likely to miss the current end-July deadline. Some of the sources of delays have been issues with spectrum pricing and licences, as well as the involvement of the Guyana Revenue Authority (GRA). The liberalisation process was started in Q316 and provides for the creation of an independent regulator, the Telecommunications Agency (TA). In practice, we do not expect the new regulator and market structure to be effective before Q118.

Digicel, GTT's rival in the mobile market, will likely enter the wireline voice and broadband markets to compete with GTT at a national level, in line with its strategy in other Caribbean markets. However, even when the appropriate regulatory framework is in place, the low return prospects of a saturated wireline market are unlikely to attract many new players in the short term. With Digicel's competition driving prices down and improving purchasing power in the medium term, other entrants are more likely to invest in wireline. Any new provider would have to also enter the mobile segment simultaneously to pose a credible threat to the two existing players.

Broadband To Benefit From Liberalisation
Guyana - Wireline Forecasts
f = BMI forecast. Source: PUC, BMI research

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