BTC Productivity Below Average
BTC is operating at approximately 43 percent below the average productivity level in comparison to telecommunications operations around the world, according to a recent report published by the PUC.
The Public Utilities Commission (PUC) is optimistic though, that within three years of the privatization The Bahamas Telecommunications Company (BTC) will achieve the additional 7 percent productivity improvement required to at least achieve average efficiency.
According to the report, national and international evidence indicates that productivity rises in the telecommunications industry over time and the rate of increase in productivity depends on the state of development of telecommunications in the particular country.
The main element of the report published by the PUC proposes a price control regulation to protect consumers from any increases in telecommunications that are contrary to the price control plan.
A number of fixed line services to which price regulation is expected are installation of a telephone exchange line, monthly rental of a telephone line, operator assisted calls, directory inquiries, in addition to local, inter-island and international calls.
Meantime, BTC is still experiencing a loss on local calls which are free of charge.
However, in order to protect low income consumers if BTC were to introduce charges for each local call, the PUC would require that a minimum number of free minutes be included as part of the monthly rental charge. This is expected to ensure continued access to a basic level of service for low-income consumers.
For a person on a minimum wage of $150 per week, the monthly rental would represent about 2 percent of his or her monthly income. PUC executives feel that this figure represents an affordable amount for basic, continued access to low-income consumers for telecommunication services.
Rental charges have not changed in The Bahamas for about 28 years. Now, BTC is proposing that the monthly rental charge increase from $9.50 to $13.75 for residences and from $20 to $28.75 for businesses. On the other hand, BTC wants to reduce the cost of long distance calls between the islands from 40 cents per minute to 20 cents per minute.
However, according to the report, these overall proposals are not consistent with BTC's licence conditions and the telecommunications sector policy. The commission, therefore, expects BTC to submit revised proposals on these charges.
The initial price control period for fixed line and cellular phones will be set for three years, after which the PUC will review both prices and the length of future price control periods.
Meantime, price control for cellular services which is now dominated by BTC, have been developed in recognition that a competitive market for this service will develop within four to five years.
With the cellular phone market rapidly developing into a competitive market in many countries, with more than one operator, PUC executives believe that The Bahamas will follow this international trend.
BTC will, however, remain the dominant provider of such services and will continue to enjoy its exclusivity for a period of two years following the company's privitization.
By Hadassah Hall, The Bahama Journal