GUAM TELEPHONE SERVICE GOES PRIVATE

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By Natalie J. Quinata

HAGATNA, Guam (Pacific Daily News, Dec. 30) - The Guam Telephone Authority officially became a part of the private sector today. Governor Felix Camacho also signed Bill 413, which provided for the transfer of retirement benefits and accrued sick leave credit for classified GTA employees.

Beginning today, the government of Guam will no longer be in the business of selling telephone services.

By midnight, Guam Telephone Authority's operations, assets and employees will have been transferred from the local government to TeleGuam Holdings with a $150 million price tag, fully privatizing the telephone agency. The transaction made the last government-run telephone agency in the nation history.

Lawrence Perez, GTA interim general manager for the last day yesterday, and who was with the agency for 16 years, voiced optimism about the transition of the agency.

"I get some happiness on a personal level knowing that the employees are happy and that ratepayers are finally going to be able to experience competitive rates," Perez said.

Perez was excited about the new company taking over and emphasized that all the work that has been put into the privatization will greatly benefit everyone.

Appointed by Governor Felix Camacho at the beginning of his administration, Perez said he was instructed to privatize the agency and to ensure that the final outcome would benefit employees as well as ratepayers.

A number of GTA employees cheered gleefully yesterday as Camacho signed Bill 413, which provides for the transition of retirement benefits and accrued sick leave credits for GTA classified employees.

Governor Camacho vetoed Bill 315, which was the original legislation that would have provided for the transition of those benefits for the classified employees.

Camacho said concerns were raised by the Retirement Fund that the bill could adversely affect the benefits received by 7,000 members of the Defined Benefits Plan.

However, Bill 413, the substitute legislation, provides for the transfer of those benefits at no expense to the Retirement Fund or the General Fund, Camacho said.

"It was the perfect remedy to resolve and address those concerns," said Camacho, adding that he was positive about GTA's transition into the private sector.

Perez explained that the $1.1 million in retirement benefits to be paid out to those affected employees would be taken from the proceeds of the sale of GTA.

"It's actually a good thing because it reduces the Retirement Fund's unfunded liability," Perez said, adding that the Retirement Fund will have 134 fewer employees to worry about.

The other $3.4 million to be paid out in accrued sick leave credit will come from GTA's operational budget.

Unlike the resistance to privatization from employees at the Guam Waterworks Authority, many of those who attended the signing ceremony welcomed privatization with open arms.

Elaine Cruz, an employee of GTA for 16 years, said she is looking forward to working for a private company, and is quite satisfied with the benefits that have been given to all of the employees who will be transferred.

In its agreement, TeleGuam promised employee benefits that include an immediate salary raise of at least 3.5 percent, five-year contracts and cost-of-living salary adjustments.

Cruz, who is the supervisor for the business section, was anxious to participate in sales and advertising areas that were previously excluded from the government agency.

"This enables us to compete finally," said Cruz, who is anxious to finally be able to expand more fully into other markets, such as Internet services.

The telephone company's status as a public entity and monopoly hindered it from competing with private firms.

Also, TeleGuam has promised through its agreement that basic, unbundled local rates would remain flat for the next five years.

Like Cruz, Ray Sayas, marketing representative, said the agency's transition into the private sector will allow the telephone business to better compete.

As for Perez, he will remain with the government of Guam and will begin working at the governor's office Monday.

Perez said an official "handing over the keys" ceremony will be held on Monday, with TeleGuam Chief Executive Officer Bob Taylor among the guest speakers.

December 31, 2004

Pacific Daily News: www.guampdn.com

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