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The Bahamas Investor

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Telecom upgrade

Telecom upgrade

BTC is leading the technology revolution in The Bahamas, ahead of market liberalization in 2014

The Bahamas Investor Magazine
January 19, 2012
January 19, 2012
Interview with Geoff Houston, CEO, BTC
by Catherine Boal

For today’s investors, telecommunications networks are essential business tools. In an increasingly globalized economy, financiers need to be accessible at the touch of a button, tuned in to constantly fluctuating markets and able to contact partners around the world at any moment–all of which is only possible through an efficient, advanced telecommunications network.

The Bahamas has come a long way since the first submarine cable telegraph was laid in 1892, running from Jupiter Inlet in Florida to the area of New Providence which became known as Cable Beach. Nowadays, the country depends on its information technology infrastructure to support its economy and drive profitability in its biggest earners–tourism and financial services.

According to market analysts The Insight Research Corporation, US businesses spent $146 billion on telecommunication services in 2010 and the industry worldwide will record revenues of $25.6 trillion by 2016. In such a fast-paced and growing sector, providers need to be acutely aware of the needs of consumers and, in The Bahamas, companies are tailoring their company strategy accordingly.

Recent regulatory changes in the sector ended a monopoly held by government-owned Bahamas Telecommunications Co (BTC) and the industry is now set to become fully liberalized by 2014. It is expected that this enhanced competition will lead to more choice for consumers, better services and greater access to technology. In short, keeping the financial community connected and making doing business in the jurisdiction more efficient.

BTC goes private
BTC began life as the Telecommunications Department in The Bahamas government. It held a complete monopoly over the sector until 2000 when cable TV provider Cable Bahamas Ltd (CBL) began supplying Internet services. While this opened up one facet of the market, BTC retained its monopoly over phone services for a further four years until Systems Resource Group (SRG) was granted a licence to provide international and domestic voice services under the brand name IndiGO.

The final push towards full liberalization of the market came in April 2011 when international communications firm Cable and Wireless Communications Plc (CWC) bought a controlling 51 per cent of BTC shares. Under the terms of the $210-million privatization deal, BTC retains its cellular services monopoly for a further three years, meaning that the market will only be fully open in 2014.

In an exclusive interview with The Bahamas Investor, BTC’s new chief executive officer Geoff Houston outlines the company’s strategies in the wake of the takeover and gives his predictions on how the market will evolve.

Q: What experience do you have in the telecommunications sector?

A: I have worked in telecommunications for 24 years and I have been with Cable and Wireless for 20 years. I’ve worked in South Africa, Panama, Kuwait, the Seychelles, Guernsey and Bermuda. Before coming here I was in Jamaica for two and a half years and then they asked me to come to The Bahamas to put together a business plan [for the company].

Q: What challenges are unique to the Bahamian market?

A: The obvious answer is the topography–having so many islands spread over a large area and needing a different approach to managing each. Also, the standard for The Bahamas is the same as in North America. Trying to achieve that standard in a group of islands that have not got the same economies of scale is a significant challenge.

Our customers expect the same as what they get when they go to Florida or New York, so we have to deliver that type of service at those prices in a small island economy.

Q: What have been your main objectives since the takeover in April?

A: We had two big challenges: first, managing the business as usual; and, second, transforming the business. While we have significant competition on broadband and we have significant competition for our business customers, there is no competition yet on mobile. We have a three-year window for the introduction of mobile competition, so the big challenge for us is to drive that transformation in such a way that gets us in the right shape for competition before it is introduced and, at the same time, have business as usual.

We needed to change up the network. The network we had was not fit for purpose. It was providing a very poor customer experience and was not able to provide the types of services our customers want in the future. We needed to put a new 4G network and we needed to get on top of the pricing. Value for money and affordability are going to be critical in a competitive market, so we started in that direction as well.

Customer service is a big element of the business which, by and large, has been missing for quite a long time, so we need to significantly improve that, and that comes in many forms–from our contact centres, right through to our engineers on the road and in retail stores. That was a big challenge.

To make a lot of these things happen, such as the price reductions, we have to focus on the efficiency of the business. We need to drive more and more costs out of the business to help ourselves become more cost effective and in the process we can hand some of that value back to customers by way of price reductions.

Q: When the market opens up in three years what do you expect for BTC?

A: The market will dictate that, but we expect to retain a large chunk of our market share.

Q: When it comes to telecommunications, what are the priorities for the financial community?

A: Cable and Wireless operates in more offshore financial jurisdictions than probably any other telephone company in the world. We have a presence in Turks and Caicos, the Cayman Islands, the British Virgin Islands, Jersey, Guernsey and the Isle of Man. We have a lot of experience dealing with the types of customers we have here in The Bahamas.

[Members of the financial community] want quality of service and reliability, particularly when dealing with banks and financial services. Having the ability to connect to global networks is extremely important, particularly because a lot of the financial institutions here are part of global businesses. Also, they look for a partner who can scale up according to the demands of their own businesses and they do expect world-class pricing.

Q: With technology moving so fast how do you ensure that The Bahamas keeps up?

A: Our global parent does business across the world from China to Monaco, and even Afghanistan. [Caribbean subsidiary] LIME is across the region. Using that partnership can help us stay ahead.

What we need to do is have better execution locally. It is not just enough to have a great idea, we need to really focus on how we execute as a business. We need to become leaner, meaner and more nimble, so that when the great idea comes along we can execute it quickly and we can remain competitive.

When I look at what we do at the moment, we do some parts well, but not consistently well and that’s the big challenge for the business.

Q: How will you ensure consistency?

A: One word: accountability. We need to drive accountability right through the organization; from the guy who is in the store talking to the customer, right through to the guy in the back office. Everyone in the business needs to understand that our accountability is to customers. We want to create a culture where we measure performance, we give colleagues feedback to help them improve and we focus on how we measure our own performance as a corporation.

Q: What do you think the future holds for the telecommunications market in The Bahamas?

A: I think access to the Internet via mobile broadband will become almost ubiquitous [in The Bahamas]. I don’t know any kids these days who don’t aspire to have a laptop or an iPhone or an iPad or an Android device.

The current generation have leapfrogged the old fixed-line phone. They now use their mobile phones even when they have landlines. I think you’ll see the same trend in high-speed access to the Internet. Kids of the future will want to access the Internet from wherever they are.

Q: And the investors of the future, what will they want?

A: They will be looking for more and more capacity and affordable prices. They will be looking for higher quality in terms of a network experience that allows them to expand their businesses.

Sidebar: BTC initiatives

  • Since its privatization in April 2011, BTC has introduced a range of new services to the marketplace, designed to facilitate business and international communication networks. The new initiatives include:
  • $42.8-million investment in a new 4G network. The network will become available in New Providence and the Family Islands over the next 18 months.
  • Two-year mobile network improvement programme to optimize the current network, reduce dropped calls and increase traffic
  • Introduction of the Next Generation Network (NGN), which will provide greater broadband connectivity at speeds of up to 8MB per second. BTC has invested $53 million in delivering the NGN, which will be rolled out over the next three years.
  • Launch of around 50 new retail stores across The Bahamas, with the flagship store located at Marathon Mall on New Providence. All stores are expected to be open within two years.
  • Lowered rates, more promotions and easier top-up facilities.
  • Removed the tariff on domestic long-distance cellular calls.
  • Consolidated customer services into one customer-care phone service.
  • The remote paradise offers a real island experience, and a world-renowned regatta

    After a harsh sell-off period, cyclicals, such as materials and industrials, could present an attractive buying opportunity

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