BTL unveils new rate structure to maintain profits
They have been talking about it for months, but today Belize Telecommunications Limited finally lowered the boom on Belizean consumers. Disguised as a tariff rebalancing, BTL today announced a new rate structure, which will drastically raise the cost of living for both residential and business customers. What the monopoly telecom has done is to essentially double rates for line rental and local calls, while reducing international and cellular service by approximately twenty-five percent. The breakdown is as follows:
Line installation rises from ninety dollars to a hundred. Phone rental climbs from two to five dollars a month, while line maintenance for residential customers jumps from eight dollars a month to twenty, an increase of one hundred and fifty percent. Business consumers are not spared, as their monthly charge for each phone line catapults from twenty dollars to an astronomical fifty. And that’s just for openers. Once you actually use your phone to place a local call, the tab will now double to ten cents a minute instead of five.
On the other side of the equation–the side BTL prefers to emphasise–some rates will drop. Long distance calls within the country will be reduced from twenty-five and fifty-five cents per minute for zones one and two, to twenty and forty cents respectively. International calls to the U.S. fall substantially from two seventy-five to one seventy-five per minute. But calls to the Caribbean, Central America, Canada and the rest of the world come down by less then ten percent.
Cellular is another area for lower rates, with a drop in activation and access fees, as well as per minute charges, which will fall from seventy cents to fifty-five during business hours and from forty to thirty during off peak time. Those rates, however, are for standard cellular; the more popular prepaid service goes down by just nine cents to a still punishing ninety cents per minute.
It is the new charges for internet service that users will find most disappointing. While the monthly access fee charge drops from forty dollars to twenty-four, the previously free first eight hours will now be paid for…and instead of the old four dollar per hour rate, web surfers will pay ten cents a minute–the equivalent of six dollars per hour. After twelve hours of use, the rate drops to five cents per minute, but that will provide savings only for the biggest internet users. Sample calculations done by News 5 indicate that typical twelve hours per month internet customers will see their bill rise from fifty-six to ninety-eight dollars monthly, while even thirty-six hours per month users will pay one hundred and sixty-eight dollars instead of one hundred and fifty-two.
At this point, a number of questions arise. The first is “why?” The answer is simple. By its own admission, when BTL’s monopoly ends at the end of next year its most likely competition will come in the areas of cellular and international calls, services for which prices world-wide have been dropping like bombs over Afghanistan. So BTL’s rate cuts here are just a pre-emptive strike to anticipate the competition. But in the local service, where new competition is doubtful, BTL feels free to jack up the rates as Belizeans will have no choice but to stick with the green giant. Thus while BTL’s profits may fall on cellular and international calls, any losses will be more than balanced by increased revenue on the local side.
What, then, one may ask, is the problem? Don’t the increases and decreases balance out? The problem is that with radically improved technology, Belizeans should expect their overall communications costs to drop, like those around the world. Under BTL’s plan, they will not only not drop, but will in fact rise. But the worst part is that BTL’s latest moves are not meant to salvage the position of a struggling utility earning profits of a lacklustre five, ten or fifteen percent on revenues. Instead, they are meant to preserve the status quo of what may be the most consistently profitable publicly held utility in the world; one which regularly earns profits of fifty cents on every dollar it collects and has rewarded its shareholders with annual dividends in excess of thirty percent. All of this at the expense of the Belizean consumer.
And in case any viewer is wondering where the Public Utilities Commission is in all this mess, we are told by P.U.C. chairman, Gilly Canton that the supposed watchdog has been neutered by the terms of BTL’s licence granted in 1988. That licence merely requires that BTL inform the minister of its intentions and does not give the minister–in this case Ralph Fonseca–the right to deny the rate changes. According to Canton, while the relevant legislation has been amended for the water and electricity industries, the telecommunication laws remain untouched. “The pieces are not yet in place,” said Canton.
Meanwhile, News 5’s calls to BTL have been met with the reply that an explanatory press conference has been called for Friday morning and any inquiries must wait until that time. The new rates are scheduled to come into effect on December first and there is already talk of a grassroots boycott by consumers who are being asked not to pay their October phone bills, ordinarily due at the end of November.
