Bahamas Telecommunications Company (BTC) is becoming a dinosaur with diminished capacity

The BTC Dinosaur
by Simon


The unmistakeable symptom which demonstrated that BTC was becoming a dinosaur with diminished capacity surfaced as the bottom fell out of its long distance market almost overnight. On the way to losing its outdated status as a state monopoly, the company started exhibiting the classic stages of grief.

First, BTC stuck its head in the sand, attempting to use legal tactics and lame arguments as to why it should maintain a laughing-all-the-way-to-the-bank monopoly with outrageously high rates.

Those rates continued to suck endless millions from businesses and homes despite long distance charges plummeting around the world, thanks to innovations from the internet to fibre optic cable and mobile phones. In addition to rapidly changing technologies, the economics of telecommunications was upended globally even as BTC remained in the first stages of grief: denial and anger.

BTC did attempt the next stage, bargaining. With fanfare it announced its introduction of Voice Over Internet Protocol (VOIP) to The Bahamas. The announcement of ViBe was curious as the company tried to convince customers that this was a revolution in long distance service. Too little. Way too late.


STRANGLEHOLD

The revolution had already occurred as Bahamians in droves turned to various VOIP options to circumvent BTC’s stranglehold on long distance. As the revolution, which BTC came too late, quickened, the Vonage boxes were stacked high at various mail courier services which Bahamians were also turning to in avoidance of a postal system which had given a new meaning to snail mail.

Still, BTC lagged behind, late in introducing various services, with all manner of excuses. But it wasn’t simply the new services of which BTC was not yet proficient that annoyed customers. As frustrating were the things it still had not mastered after many decades in operation.

For too many, getting a new landline was the equivalent of root canal with the latter perhaps less painless and quicker. While jurisdictions around the world enjoyed landline voice mail for some time, BTC, despite supposedly having the technology, was once again late in introducing such a relatively simple feature.

It took some time for BTC to respond to the BlackBerry, despite our position as a world financial centre with many travelling here to conduct high-end business. And, despite the millions of tourists we host annually.

BTC’s time problem was at times also comical. A friend recalls dialling 917 to get the time and listening to a time off by several minutes. If you call 917 today, the long pause is a fitting example of the company’s woes. Of course, many people no longer call the time. Instead many consult portable devices especially cell phones now more ubiquitous than watches.

So, starved of overpriced long distance revenues, BTC turned to cellular services to gouge customers to fund its operations and fuel its growth. Today, The Bahamas has some of the highest cell phone rates in the world. It was not too long ago that we stopped paying for making and receiving a call on our cells.

BTC will tell us that they charge what they do in order to invest in new technology, serve a far-flung archipelago, pay decent salaries to valuable employees, while maintaining a certain level of service to customers.

TOO SMALL

And, this is precisely the Catch-22. As a stand-alone entity the company is too small and does not have the economies of scale necessary to compete with other telecoms while providing Bahamians with less expensive and improved service.

BTC is too small to provide, in a more cost-effective manner, the capital expenditure and investments needed to keep pace with advancements in areas from mobile data to broadband. Moreover, as a part of a larger network, BTC will be able to diversify its revenue streams in order to provide cheaper and better service.

One argument making the rounds is that BTC and The Bahamas can mirror Brazil, Singapore, South Korea and Australia in terms of the ability of the governments of those countries to invest in their respective telecommunications sectors. The sheer size of those countries, whether geographically or economically, makes such comparisons unconvincing.

In 2009 terms the gross domestic product of The Bahamas was around $7 billion dollars. Singapore’s was approximately $182 billion, South Korea’s was $832 billion, Australia’s was $924 billion and Brazil’s was a near $1 trillion dollars. In terms of market size and the ability of these governments to invest in telecommunications as opposed to The Bahamas, it is a matter of comparing a single apple and an orange grove.

The case for privatization is clear if The Bahamas is to prevent the lumbering dinosaur of BTC from turning into a fossilized giant. Cable and Wireless is the sort of international partner that may breathe new life into BTC, which, as a stand-alone may only survive through Bahamians endlessly paying exorbitant rates.

The heated rhetoric flowing from the proposed arrangement between BTC and Cable and Wireless has obscured many facts, some out of fear and some out of political manipulation in service of certain interests.

OVERSIGHT

The Bahamas will maintain a 49 percent stake in BTC. This will ensure critical influence in the new BTC. Further, the Government will have significant regulatory and oversight power, to help check and balance Cable and Wireless.

Moreover, Bahamians from every walk of life will be able to purchase shares in BTC as the Government eventually makes 25 percent of its shares available to individuals and groups such as union pension funds. And, within three years, Cable and Wireless will face new competitors, including any consortium of Bahamians interested in the telecoms sector.

So, in relatively short order, Bahamians will enjoy cheaper rates, better service, more communications options and broader economic empowerment through access to shares in a telecom.

Yet, those realities are being drowned out by a dying dinosaur still in denial, still angry and still bargaining, grieving for a past that is gone and a future that is unsustainable as it charges its customers outrageous prices for what others in the region and around the world pay pennies.

Over the many years, BTC has had many dedicated employees who have rendered valuable service to the company and The Bahamas. But collectively, the current company, like the dinosaurs of old, has been hit by life-altering realities in a new global telecommunications landscape forever transformed by the internet.

To provide its customers with less expensive and more reliable service, BTC must act less as an employment bureau for featherbedding cronies and constituents.

For some, the new reality is a depressing, the penultimate step in the stages of grief. Still, it appears that despite all the shouting and screaming and cries of Armageddon, most Bahamians long ago accepted the need for change. While they may be somewhat nostalgic about the old Batelco, this is less an expression of the last stage of grief, and more a celebration of a new chapter in telecommunications.

Of course, for some, acceptance will only come reluctantly and painfully. Yet even for these individuals, indeed for all Bahamians, BTC is one dinosaur from whom the country can still gain significant, though declining benefits, before it slides into possible irrelevance and a weakened state if left in its present form. If that happened we really would have something to mourn.

bahamapundit

Bahamas Blog International