All too often telecommunications companies blame competition for the changes they need to make to their operations. However those changes tend to be necessary, but are not undertaken without that external pressure\u2026<\/em><\/p>\n
Last week, the Chief Executive Officer (CEO) of the Bahamas Telecommunications Company (BTC), Leon Williams expressed the view that the BTC was not ready for competition, and that employee jobs are at risk from the anticipated competition (Source: Nassau Guardian<\/a>). Currently, the BTC is the sole mobile\/cellular services provider in the Bahamas. However, the government is actively engaging potential new entrants for that market.<\/p>\n
Typically, the transition from a monopoly to a liberalised and competitive telecoms environment is not immediate. Governments need time to develop the requisite policies and frameworks, whilst the incumbent telecoms firm will also negotiate for time to re-position itself for the expected changes.<\/p>\n
In the case of the BTC, a condition of the purchase of the Government\u2019s majority stake in the firm by Cable and Wireless Communications (CWC), was that the mobile\/cellular market would not be liberalised for a period of three years. That period, which officially ended in April of this year, gave the company some lead-time to adjust its systems to accommodate new players, in addition to whatever efforts might be needed to thrive in a competitive environment.<\/p>\n
Further, by no means should there be an expectation that the grace period given should be elastic \u2013 in order for incumbent carriers to have additional time to prepare perfectly for competition. The onus is on them to execute strategically with regard to readying themselves for the intended development of the sector.<\/p>\n
With the threat of competition imminent, frequently, incumbent telecoms firms appear to cultivate a fear of job loss. In last week\u2019s interview with Mr. Williams, and as indicated above, stated that jobs were at risk:<\/p>\n
\u201c[There are] 738 employees at BTC whose jobs are presently at risk because any new competitor coming into this market will not come with more than 70 people\u201d…<\/em><\/p>\n
\u201cThat will put those 738 jobs at risk and the people at BTC, the employees, must understand that, and the public at large must understand that\u2026<\/em> (Source: Nassau Guardian<\/a>).<\/p><\/blockquote>\n
It is also important to highlight that the BTC has undertaken its own initiatives to downsize its operations when competition was not as imminent. In July 2011, it launched a voluntary separation programme (VSP), through which it sought to reduce its then 1,300-strong staff base, by around 400 (Source: ICT Pulse<\/a>). At that time, reports were that the VSP was oversubscribed, suggesting that employees were more than eager to explore opportunities outside of the BTC.<\/p>\n
Competition is not only good for the consumer, but also the telcos<\/h3>\n
To hear incumbent telecoms providers speak about the introduction of competition, one would believe that competition would be exceedingly damaging to them, with a broad range of negative and undesired consequences. However, on their own, those firms tend to be \u201cfat and lazy\u201d, meaning, among other things, one usually finds that:<\/p>\n
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- their infrastructure is poorly maintained, and tends to be concentrated in profitable areas<\/li>\n
- their service offerings are limited and not the best quality, and<\/li>\n
- though customers might be dissatisfied, they are not particularly eager to address their concerns.<\/li>\n<\/ul>\n
However, when they must position themselves to operate in an environment where customers might have some choice in service provider, and the other players will be aggressive in their effort to secure market share, the incumbents\u2019 posture begins to change:<\/p>\n
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- they begin to whittle away the fat in their organisations to become more streamlined<\/li>\n
- they aim to become more efficient \u2013 systems and processes are optimised<\/li>\n
- they are more prepared to invest in their plant and infrastructure, and<\/li>\n
- they become less complacent, and aim to be more agile and responsive to the markets and customers they serve.<\/li>\n<\/ul>\n
When all is said and done, those changes in incumbents are really not a bad thing. However, in most instances and without that external push (such as competition), they tend not to be proactive in introducing those measures from which both themselves and consumers benefit.<\/p>\n
Internal pushes for greater efficiency and profitability tend to result in similar outcomes<\/h3>\n
Finally, although the BTC may be expressing a knee-jerk reaction of doom and gloom about competition, it is important to emphasise the fact that if the company, on its own, optimises its operations \u2013 in keeping with the goals set out by its parent company, CWC \u2013 job loss, among other things, would likely result:<\/p>\n
\u2026 Williams suggested that, as BTC\u2019s parent company Cable and Wireless Communications (CWC) cuts costs in a competitive market, it will likely look at BTC\u2019s employees, who represent the highest cost per employee for CWC in the Caribbean\u2026<\/em><\/p>\n
\u2026\u201cIf you heard, [CWC CEO] Phil Bentley and the other people said Cable and Wireless is looking to eradicate $100 million worth of costs,\u201d Williams said.<\/em><\/p>\n
\u201cThis is not rocket science to know what the cost first targets will be, what the low hanging fruits are\u2026\u201d<\/em> (Source: Nassau Guardian<\/a>).<\/p><\/blockquote>\n
Image credit: SlugsOnTheRefrigerator<\/a> \/ flickr<\/em><\/p>\n
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