Prime Minister Perry Christie has been dialing up the rhetoric about reclaiming 2 percent of the Bahamas Telecommunications Company (BTC) so the Bahamas government could claim majority ownership and regain control of the company.
Wait! Didn’t we try that already? If I recall correctly, that didn’t really work out so well.
Under the management of the Bahamas government, BTC generated years of complaints from Bahamains.
Why on earth would we want to go down that road again?
Now, it’s true that there have been several outages since Cable & Wireless (C&W) bought the majority share of BTC from the government in April last year for US$210 million. But what else is to be expected when one is upgrading a telecommunications infrastructure that was in such bad shape as BTC’s was?
And, the biggest outage conveniently occurred the day that the CEO of C&W, Tony Rice, was meeting with the Prime Minister, making many people think that was a planned act of sabotage.
If you think BTC’s problems started with the sale of the company to C&W, you must have a very poor memory. The company has always been years behind and developed a reputation for terrible service.
Back in February of 2003, a Bahama Journal article stated that members from both sides of the House of Assembly agreed that the reality of electronic commerce in The Bahamas was being stagnated by what was considered low quality telecommunications infrastructure.
It was at that time, while the economies of other countries were being bolstered by cell phone services and e-commerce, that Batelco froze their cell network because of over-capacity. The CEO of the company at that time, Michael Symonette, said the cell network had reached capacity, resulting in frequent call drop-offs and less than acceptable levels of toll quality voice services.
A few months later, the situation had grown even worse with most of Batelco’s customers expressing frustration with the inadequate wireless service of the company and clamouring for relief.
One customer said at the time that he was, “tired of this nightmare of no signals, missed calls that go straight to your voice mail” and “this new text message feature that arrives hours late.”
Senior Vice President and Chief Operations Officer of the BTC at that time, Leon Williams admitted that there were serious problems with the cellular network. “The network is totally congested and that is the major problem,” Mr. Williams said.
Even Bradley Roberts acknowledged the importance of privatizing Batelco back then.
“My government recognizes that the development and provision of a world class telecommunication infrastructure is critical to the ongoing economic and social development of The Bahamas. If one accepts that modernized telecommunication infrastructure is central to socio-economic development, then so too is the privatization and liberalisation of telecommunication services as a critical pre-condition of development,” Mr Roberts published in a policy statement at the time.
In August, 2003, the newly formed Public Utilities Commission issued a report stating that BTC was operating at approximately 43 percent below the average productivity level in comparison to telecommunications operations around the world.
Not much has changed. Just last week, the Utilities Regulation & Competition Authority (URCA) said BTC’s, “productivity levels remained below those of comparable operators.” URCA has now set efficiency targets for BTC to achieve over a period of time. Would BTC, managed by the government, be able to meet those standards?
It was also in August, 2003, that Batelco announced an upgrade to a GSM system that would enable Internet browsing and other technologies that had already been in place around the world for years.
By that time, the whole Internet bubble had already burst and Bahamians hadn’t even gotten on board yet.
More than a year later, in December 2004, columnist Larry Smith, speaking about the BahamasB2B sponsored Web Awards, said:
“The unfortunate reality that we are not yet a ‘wired’ society was brought home during the recent Bahamas Web Awards (created by Bahamas B2B), which evaluated over 40 Bahamian web sites.”
Smith said the event underlined just how far we have to go. He was refering, of course, to the Internet, which was created in America in 1983 but that only first appeared on our horizon twelve years later, in 1995.
Smith pointed out how The Bahamas lagged far behind in telecommunication technology, saying that it was due to Batelco’s monopoly.
By June 2005, Batelco’s GSM system was up and running… well, sort of. Problems were rampant. Batelco issued a public notice at the time that said the company was experiencing interruptions in its prepaid wireless services as many customers using the new network had a difficult time trying to make cell phone calls.
The whole situation had some subscribers expressing great frustrations and concerns regarding whether their cell phones would work even in the event of emergencies. They went so far as calling on BTC to either shut down the network, or discontinue charging service fees to subscribers until a closer examination of the network is conducted and the system was fully operational.
By August 2005, consumers speaking at a PUC forum were opposing proposed rate increases by BTC, saying the increases were the result of “inefficiencies” rather than inflation.
BTC was slammed for its “unmitigated gall” in seeking to raise business and residential access rates after providing “30 years of poor service”.
“When a company with the poor performance record like BTC’s has the unmitigated gall to propose a price hike, it makes one sick to the core,” one woman told a local newspaper at the time.
In December 2005, BTC CEO and president Michael Symonette was removed from his post, allegedly for refusing to accommodate meddling by Minister Bradley Roberts. Such are the problems that one can expect from government-owned utilities and a big reason why returning majority control of BTC to the government poses such a danger.
Speaking of Mr Roberts, it is ironic that he should be so vocal about the service disruptions being experienced with Cable & Wireless operating BTC.
When Mr Roberts was the Minister in charge of BTC, the company suffered numerous outages, in addition to providing abysmal service. Is that what we can expect again from BTC if the PLP reclaims majority control?
In March 2006, cellphone service was constantly interrupted, affecting nearly all subscribers. The mass disruption of cellular service was due to BTC’s attempts to improve service by installing new equipment.
It appears that C&W aren’t the only ones who have problems when making major upgrades to infrastructure.
Roberts said at the time that he was aware of the problems but advised that there would be interruptions as they carry out upgrades from one system to the next.
It is unfortunate that he can’t be as understanding now as he was then.
Also, in June 2006, a report analyzing The Bahamas’ Information and Communications Technology (ICT) from the Inter-American Development Bank (IDB) reported that the high cost of telecommunications was eroding certain comparative advantages and is negatively affecting the country’s two top industries.
“For many businesses, telecommunications is the highest or second highest cost in their overall operating budgets,” the report stated.
“The high cost of telecommunications is also discouraging the export of services for which The Bahamas would otherwise have certain comparative advantages,” the report added.
“For example, one of the reasons conference organizers are reluctant to choose The Bahamas is because of the very expensive prices for making international calls and roaming on The Bahamas’ only cellular mobile network,” the IDB said.
Two months later, consumers were again outraged over a two-day BTC system failure which prohibited the usage of their GSM cellphones.
An article in the Bahama Journal, published in September 2006, noted that Bahamians were capable of “running” BTC, but questioned whether they could do it well.
“BTC is ‘profitable’ under Bahamian management, but only by price gauging, overcharging customers and maintaining a monopoly on certain aspects of telecommunications,” the article stated.
Ironically, one of the people who has been appointed to wrestle back control of BTC from the hands of Cable & Wireless admitted back then that he was not the right man for the job.
Leon Williams, then-acting president and CEO of BTC, declined to comment specifically on why the government was making moves to privatize the company, responding that it was a matter for the shareholders instead. He said working with privatization is “outside his field of endeavour.”
He must have read “Privatization for Dummies” since then.
Also, in September 2006, Ivoine Ingraham took BTC to task when they clumsily introduced Blackberry service, questioning how long it would take for BTC to iron out all the kinks in the newly implemented system.
“TDMA has been here for many years [and] BTC never tried to correct that system. GSM came and the serious technical difficulties existed from day one, yet they have not been addressed. Now it is BlackBerry, you be the judge,” Ingraham wrote.
“Judging from their track record, BTC will not service their mobile phones. They either don’t know how or they simply do not care or both. BTC’s record is to collect as much money as they can, brag about their profit and give lousy service and just like Perry Christie, promise they will fix it later,” he added.
So, it appears that BTC suffered numerous technical “challenges” well before Cable & Wireless even entered the scene. In fact, Bahamians should probably be thankful they were able to unload the beleagured company for as much money as they did.
An article in the Nassau Guardian, published in March 2007, called BTC’s GSM phone service “a national disgrace,” saying that, “customers are furious at the nation’s dysfunctional government-run phone company, claiming they’ve been ‘ripped off’ on GSM service.”
Another newspaper article with the headline, “Bad VIBE for BTC,” reported that, “less than six months after BTC introduced Voice Over Internet Protocol (VoIP) technology, the system is in shambles and customers are furious.”
I guess the people who support Perry Christie’s quest to reclaim the company have very short memories, because many of them were the ones who complained the loudest back then.
Did the problems get resolved? Apparently not, because in August of that year, Grand Bahama customers were once again blasting BTC’s lousy cell phone service.
“Irate customers in Grand Bahama (and probably throughout the Bahamas) have had enough of Bahamas Telecommunication Company’s (BTC) poor quality cellphone service with some demanding compensation for a service they rarely get on a reliable basis,” an article in the Freeport News reported.
By February 2008, BTC’s problems hadn’t gotten any better. The company was forced to credit customer accounts after yet another system-wide failure.
“Bahamas Telecommunications Company (BTC) officials spent the better part of Tuesday crediting $5 worth of airtime to the accounts of hundreds of thousands of cellular telephone customers in a symbolic gesture designed to smooth the waters after a systems failure last week left those customers without the crucial service,” reported the Bahama Journal at the time.
The move amounted to a roughly $1 million loss for the company, as there were some 200,000 active customers on the pre-paid network at the time.
During the months of December, 2008 through the end of January, 2009, BTC cell phone customers were forced to suffer interruptions in service again, as the company continued testing its newly-expanded but troubled GSM network.
In June 2009, cell phone service in The Bahamas was deemed among the “worst in the world,” in a newspaper article that pointed to dropped calls, failed text messages and voicemails that appear hours later.
Is this the service we can expect if Perry Christie’s ill-conceived plan to reclaim the majority of BTC comes to fruition?
Meanwhile, there are many prominent Bahamian business people who have gone on record stating that they think government taking back control of BTC is a bad idea.
Oh, not to mention the fact that international ratings agency, Moody’s is questioning the motivation, wisdom and financial viability of Mr Christie’s bid to regain control of BTC.
In a July 31, editorial, the Editor of the Tribune wrote:
“As far as those of us who for years have had the misfortune of working with the incompetence of a government-owned telecommunications company, it’s like going back to the stone age. But it seems that instead of making sound business decisions for the country, this government is going to rule by emotions and nationalistic sentimentality.
“Those Bahamians with an ounce of business sense and who understand what is happening will agree with an important investor who sees this attempt to take back BTC as nationalisation. It’s going the way of Argentina and Venezuela, the investor predicted.”
Rick Lowe, Vice-President of the Nassau Institute and Operations Manager of Nassau Motor Company told a newspaper reporter that he felt Moody’s probe into how the government intends on paying for the shares is valid, in the sense that “they will not get it back for what they paid for it”.
“The government can’t force them to sell. I suppose they can attempt to force them to sell, but then there would be huge ramifications,” Lowe said.
The Nassau Institute said the government is viewing BTC is a potential “cash cow” to alleviate its debt woes. Yet, just last week, Geoff Houston, the CEO of BTC, said the government is already receiving almost double the revenue from its current 49 percent ownership than it did prior to the sale.
In a Nassau Guardian interview, Winston Rolle, President of the Chamber of Commerce and Employers Confederation, questioned whether government control of the country’s mobile services provider is indeed in the best interest of Bahamians.
He said the government “does not have a good track record” when it comes to making business decisions and running profitable entities. He agreed with Moody’s skepticism on the government’s ability to buy back the country’s only mobile services provider.
“Let’s face it, the only way you can buy it is if you have a willing seller,” Rolle said. “If CWC isn’t open to selling its two percent, or however much, then it will be very difficult for the government to buy it back. We have some major deficit issues that we’re trying to overcome. Where is the money coming from?”
Superwash President Dionisio D’Aguilar described Mr Christie’s intentions as “a major mistake”. The former Chamber of Commerce Presdient said it had taken 10 years to privatize the company and urged: “My God, leave it alone.”
All of these people are successful in business and rarely have they all agreed on the same thing. It would be foolish to dismiss their unanimous concerns.
Aside from the fact that the govermment can’t afford to buy back BTC, and couldn’t manage it correctly even if it did take it back, it appears there are many good reasons why Mr Christie’s plan is ill-advised.
In fact, I can not think of even one good reason why the Prime Minister would be pursuing this avenue, except to appease a small subset of overly-nationalistic supporters who are apparently oblivious to the negative ramifications of such a move.
If you can think of any good reasons, please share them with the rest of us. Or let us know what you think about the matter in the comments section below.