BTL squares off with press on price hikes
Two days after BTL dropped a bombshell on consumers when they announced a newrate structure, one that will bring substantial increases in local call rates and line rentals, this morning the company held a press conference to, as they put it, explain the new prices to the public. While BTL is convinced they’re selling a good deal, members of the press weren’t buying it.
Ediberto Tesucum, CEO, BTL
“Human nature is such that there will always be a reaction, even if there is a good package people will react negatively to these things. And we will deal with those as they take place as well.”
Janelle Chanona, Reporting
And so to deal with the already negative reaction that has surfaced for the company’s new rate structure, today, B.T.L. armed itself with plenty of colleagues on hand for moral support and did its best to detail the reasoning behind the drastic increases.
Karen Bevans, G.M., Marketing and Sales
“This new structure will bring about fundamental changes, good news and great benefits for our customers.”
During a forty minute Power Point presentation, B.T.L. made sure to emphasise the drops in prices. But there was no getting around the one hundred and one hundred and fifty percent increases that were also being proposed.
Karen Bevans
“Our monthly fixed charges have gone up, but importantly, overall customers will save three million dollars. So the more you use, the more you save.”
Ediberto Tesucum
“If we did not stand by what we say probably like many other people do, we’d put the good news first and hide the bad news afterwards. We are confident that this is good news for our customers.”
Stewart Krohn
“Okay so let’s talk about hiding. Mrs. Bevans when she opened her presentation, says this is good news and presents great benefits for the Belizean public. I mean is this some sort of joke or what? We all know Mr. Tesucum that this new rate structure is good news and great benefits for BTL and BTL shareholders. And it is very simple, that the reason…everyone knows why you made this new rate structure, because you are going to have to bring down the rates in the competitive areas. Mrs. Bevans said it herself. You are going to be forced to bring those rates down. But in the local rates, you are not going to have competition because the barriers to entry are too high. You are not going to have competition, so you jack those up and virtually rape the public. The whole purpose of this exercise Mr. Tesucum to anyone who can read, is that you are trying to maintain the company’s profits. Those profits are obscenely high and I stress the word obscene. Can you give us an example of a public company that pays thirty percent dividends.”
Ediberto Tesucum
“Let me start by saying that you cannot blame the company for being profitable. That’s our business. If we have efficiency in our company, we have to be more profitable”
Stewart Krohn
“Mr. Tesucum, you are a monopoly and you are a monopoly by the fiat of the government of Belize. You cannot compare a monopoly company to a company with competition. It is that simple. Since 1988, you’ve been a monopoly. If you’re so interested in, you said one of the goals was economic development, if you wanted to promote economic development, ten years ago, why didn’t you lower the rate?”
Ediberto Tesucum
“Stewart let me just state that no business and you are a business man as well, is not going to look at its profits first and foremost? It’s that simple. Why would we have done that ten years ago when didn’t have to do it. When we look at the competitive environment as well and other people coming in, do you think they are going to invest in this huge infrastructure that we have in Belize? Do you know that the cable plant alone is the greatest, biggest investment that we have to put in? And that’s where we have our customers, the low-end customers, everybody coming in as well. We have to take this into account that when these people come in, they might come in with a V-Sat for example, they don’t have to go through these things. We as a company have to make sure that we remain competitive, and for us to do it we have to take everything into account.
Another hot topic proved to be B.T.L.’s new economy package where in essence, the phone is strapped to only make emergency, operator and prepaid calls.
Stewart Krohn
“Let me explain what the economy package really is and you know it as well as I do. It’s a way to get rid of your problem customers, those same poor people who don’t pay their bill and that you have to disconnect and reconnect and fight with every month, now you get them off your rolls and if they want to make a call, they use a prepaid phone card. We all know what the prepaid phone card business is, it’s the greatest positive cash flow weapon that business ever found. You get all your money up front and you don’t have to worry about collecting a bill. So this so called economy package that is such boom to poor consumers, well all of us going to be poor after December first, maybe we’ll all get this great economy package, it is merely a way to increase your cash flow and increase your profits. We know that and you know that, so why go on with this sham…”
Karen Bevans
“You have to look at it with the eyes of the customer. Customers often come into our office and ask for a package of this nature. They want control, they want to make calls when they want without getting a bill at the end of the month. They leave housekeepers in their homes, they want control of their telephone usage. They want to be able to say that I could leave a five dollar card at home and know that my child will not exceed that rather than at the end of the month, get a five hundred dollar bill. So I think this package is directly a response to our customers, we cannot look on it on an individual basis. But basically, the customers request comes first and the customers are asking for things like this.”
B.T.L. has maintained that the re-balanced rates are as a result of the decision to remove cross-subsidies. But given the widely held belief that the rate changes were brought on by the prospect of competition in 2003, journalists wanted assurances that there would be no more price hikes after December first, when the rates are slated to take effect.
Jules Vasquez
“Is this zero subsidy? Have we hit ground zero for local calls? Is it costing you ten cents. ?”
Ediberto Tesucum
“Let me answer you this way, we have to reflect the cost of our investments. As it is right now, it’s reflective of that. I don’t know what will happen two years from now.”
Jules Vasquez
“I feel at some point that I am paying for the cost of two hundred thousand a month for Carlisle’s management team or for somebody’s Beamer. You see my point? BTL has been rewarded by success and now you all feel you are being victimised by your own success. But I’m saying, I don’t understand at what point do you draw the line. Who is subsidising what?
Ediberto Tesucum
“I don’t know what our investments will be like in two years time, I don’t know if we will have more hurricanes as well? And we have to take these things into account, if and when these things happens and our costs seem to remain as they are today when we look at the equation itself, then they will remain the same. But I couldn’t say whether they will increase or not. I don’t know, it’s simply a cross equation.
During the crossfire, company executives made it clear they felt they were being victimised for what they have deemed necessary actions.
Ediberto Tesucum
“When we look at these rates here, if we are going to talk about looking at the public pressure itself, we ask ourselves, why only BTL? When we have pressures for gas for example, butane gas, when we have pressures for gasoline, why is it that the government doesn’t step in and do their job as well? We should be proud that BTL is a success story in this country. BTL has invested so much money into this country. Thirty percent of the profit revenue we collect, go back to the government by means of taxes. So, if we are going to talk about lowering rates, let the government take away the sales tax. Let the government look at our income tax as well. Why are we paying nineteen percent, when other public utilities such as B.E.L. pay one and a quarter percent. If they were to do that, then our rates would look even better than they are today.
There have been consultations with the government of Belize, they are aware, not from the fourteenth, long before then, they have been aware of what we had intended to do. In fact, they have the figures as well. And so, once we wanted to wait, you know what happens there I don’t know, but the fact is they have been aware of these things there. Now as far as the issue of the consultations are concerned, let me just state that we are convinced that what we have presented and what we are going to introduce to the public, we have nothing to be afraid for because this is good news for the customers.”
But according to Public Utilities Commission, more than forty people have already said the new rates are bad news, foreshadowing that after the rates take effect on December first, the P.U.C. will hold public forums. If they are satisfied that the prices are unfair, P.U.C. will then have the power to change the rates. B.T.L. says at this time, they aren’t prepared to disclose how they would handle that situation.
Karen Bevans
“I do think its something that executives of the company have to discuss. I don’t have an answer for it right now. I don’t what will be our position, but definitely after discussions after this press conference, then we could keep you informed.”
Reporting for News 5, I am Janelle Chanona.
BTL says it plans to meet with their major business customers next week and have already planned several talk show appearances both on television and radio to further explain the new rate structure.
