The San Juan Star / August 18, 1997
By Larry Luxner
WASHINGTON -- Guyana, an isolated English-speaking nation on the northern coast of South America, has long been known as an exporter of gold, diamonds, rice and bauxite. For several years now, it's also made money through another lucrative source of dollars: audiotext.
In 1996, Atlantic Tele-Network -- parent company of Guyana Telephone & Telegraph -- raked in over $100 million from audiotext services, defined as inbound, long-distance traffic comparable to information services available through "900" numbers in the United States.
Yet the immediate financial picture for GT&T is not encouraging. ATN freely admits that it's heavily dependent on audiotext -- often known as phone sex -- to keep GT&T afloat. That worked well when Guyana had the lion's share of the business, but now that Guadeloupe, the former Soviet republic of Moldova and other countries are jumping on the audiotext bandwagon, GT&T's profits have shriveled up.
"Audiotext minutes are down about 10% from the same period last year. Revenues are down 35% from last year, and as a result, our income is down by around 50%. If the trend were to continue, we would be in jeopardy. It doesn't appear that's the case," said ATN President Cornelius B. Prior. But he said the company will ask the Guyanese Public Utilities Commission (PUC) within the next 30 days for a significant rate increase -- from 35 cents a month for basic phone service to $2-3 a month.
"If we don't get the rate increase, we would go to court and claim a breach of contract," Prior told The STAR. He said "the downturn in traffic has absolutely nothing to do with the local pressures which are springing from other sources. The government doesn't like audiotext, on the other hand, the PUC has ordered us not to discontinue audiotext because they think it's a wonderful thing to subsidize local expenses. We have been told time and time again that if we have a reduction in revenues, the government will stand behind its contract to give us a 15% return on investment."
In 1996, the company logged 122.5 million minutes of audiotext traffic -- nearly twice the amount of conventional inbound and outbound long-distance calls combined. That audiotext traffic generates over $100 million in annual revenues, enabling GT&T to boost the number of access lines in Guyana from 13,000 six years ago to 51,000 today.
According to statistics provided by the Geneva-based International Telecommunication Union, Guyana recorded 24.4 minutes of outgoing traffic per inhabitant and 461.0 minutes per subscriber in 1995 -- more than any other country in South America. Even more curiously, incoming traffic dwarfed outgoing traffic by a factor of 10.
So who's making these calls to Guyana?
The answer is simple: Americans, Canadians and Europeans, mostly men, eager for a little unrestricted phone sex at prices as low as 60 cents a minutes plus tax.
While ATN freely admits that the majority of audiotext volume consists of overseas callers dialing up pre-recorded sex lines, company spokesman Edwin Crouch said sports scores, psychic readings and horoscopes are also available through the same medium.
"We're pretty candid when it comes to this stuff," Crouch said in a recent interview from St. Croix, U.S. Virgin Islands, where ATN has its headquarters. "One of the things we have in our agreements [with audiotext companies] is that they cannot name Guyana as a destination in advertisements of a sexual nature. But either by industry practice or by law, they have to say it's an international call."
Nevertheless, the major complaint leveled against ATN by the late Guyanese President Cheddi Jagan and other critics is that the company profits enormously from these so-called "dial-a-porn" services but has done precious little to improve basic phone service since 1991, when ATN bought an 80% chunk of GT&T from the government for $16.5 million.
"Five years later, the situation has not changed dramatically," claims an Inter Press Service dispatch from Georgetown. "The service is still unreliable, and many rural and coastal towns remain without telephones, forcing residents to travel miles to urban centers to place their calls."
Colin Vickerie is chairman of New Jersey-based Carivest Distributors Inc., which is organizing a Guyana Liberalization Fund to encourage overseas investment in manufacturing, agribusiness, telecommunications and other sectors of the Guyanese economy. He says ATN should be more interested in improving local phone service than providing foreign callers with cheap sex thrills.
"We're very disappointed that the company is linked to such activity," said Vickerie. "It doesn't show Guyana in a good light. They're making a lot of money, and the country's being blamed."
Crouch retorts that "we don't monitor these calls" and that "anytime there's a problem with people using audiotext, we always cooperate with the authorities." He adds that ATN has quadrupled the number of access lines in Guyana since it took over GT&T. ATN, which is currently spinning off Vitelco -- the local phone monopoly of the U.S. Virgin Islands -- says the PUC's refusal to let it increase tariffs substantially has prevented it from, offering better service.
Yet no one denies that most of ATN's profits come from audiotext. And since the Guyanese government still owns 20% of the company, it's not complaining too loudly either -- even though the PUC has reportedly received angry letters from PTT officials as far away as Denmark, the United Kingdom and Hungary.
In the last few years, companies that offer audiotext services -- primarily for U.S. callers -- have moved offshore due to tighter domestic regulation of the phone-sex industry by the FCC.
"Before 1992, most of these calls were placed over domestic lines, but there were lots of problems, like allegations of false billing and access by minors," said an official at the FCC's International Bureau in Washington. "Exemptions from the tariffed services rule -- which required disclosure [of the nature of the service] and the use of PIN numbers to make sure only authorized calls were made -- allowed these audiotext companies to become carriers and file tariffs with the FCC. But that was repealed in the 1996 Telecommunications Act. Getting rid of this exemption has caused a lot of people to withdraw from the business, and consequently the complaints have dropped way off."
But at the same time, he added, many audiotext providers have simply moved offshore, where it's next to impossible to find them, let alone regulate them.
"What they're doing now is putting these services overseas and charging for them at the ordinary tariffed rate," said the FCC official, who asked not to be identified. "So if AT&T provides long-distance service to Guyana for $1.50 a minute, that's what it costs to make sex calls. That's all the [audiotext companies] can charge."
Not surprisingly, and FCC document made public last year lists Guyana as one of the world's worst offenders of "dial-a-porn" services, followed by the Dominican Republic, Suriname, the Netherlands Antilles, Hong Kong and Panama. Yet many Guyanese are unhappy about how their country is being used as a gateway -- in international advertising and increasingly on the Internet -- for pornography.
Last December, the Catholic Standard, a church-run newspaper published in Georgetown, revealed how Web surfers are now able to download animated versions of sexual material onto their PC screens, through companies using Guyana telephone numbers.
Indeed, recent ads in U.S. computer magazines invite readers to dial 592, the access code for Guyana, and "Unleash Your Cyber Lust" or "Enjoy the 42nd Street Peep Show On Your Computer." One ad even says: "Call from your home or office, and link up now with Girls of the Net." Again, the ad displays a phone number beginning with 592, Guyana's country code.
While ATN admits that the majority of audiotext volume consists of U.S. and overseas callers dialing up chat lines and pre-recorded sex lines, it insists that without it, the company would never be able to afford fixed wireless and other technological improvements.
Said GT&T's Minnich: "If audiotext died tomorrow, we'd be in real trouble because of the low rates. The Guyanese people can't use [audiotext services] anyway, so we switch it, send it back and forth, and pour the money back into the system. If the government would give us sufficient rates to let the company stand on its own, we would eliminate our dependence on audiotext altogether."