by Felicity Johnson
It is difficult to remain non-committal in the face of the farcical statements, righteous indignation and blame-naming by so many who have long known the facts concerning the present redundancies at BTC.
Whilst it is regrettable that employees must lose their jobs at BTC or anywhere else for that matter, particularly in these difficult economic times, it is well known that competition in telecoms and lower prices for services come firstly at the expense of cutting operating costs, and specifically, lower staff costs.The redundancies should therefore not be a surprise to anyone because the history of the long road to rightsizing BTC is well documented in the public space.
In March 1997, the FNM was returned as the government with an impressive majority in Parliament. Included in the FNM's platform for its second term was the privatization of the then monopolist telecommunications Corporation, in keeping with international practices of the day.
Being the Bahamians that we are, few of us noted this inclusion in the party platform and even fewer of us understood the concept of privatization and what it would involve, nor, in the heat of the campaign did we even care.
A year later, in March 1998, when the Cabinet engaged Deutsche Bank as the lead consultant for the Corporation's privatization preparation, scant attention was again the order of the day, until September of 1998 when Deutsche produced its report.
The report was a reality check, a dash of cold water in a complacent and bloated corporation that provided its 2,200 employees with a cradle to grave financial security system,thanks to powerful unions which ensured employee compensation, regardless of competency or work ethics.
The Deutsche report stated that the corporation only required 500 employees to run efficiently.All concerned laughed in disbelief at such a ridiculous recommendation.How does an entity with 2,200+ employees running it need only 500 employees to run it efficiently people asked.Did that mean that 4 or 5 people were doing the job that 1 person should be doing? Or was it that some employees had nothing to do?
In any event, the public brouhaha in early 1999 created by the unions of the corporation began, with the amazed public looking on in disbelief. The first downsizing exercise via the "package" was conducted amid union dramatics, and millions of dollars of the public's money was dished out pursuant to very generous calculations.
By mid-1999 the corporation's employee population had been halved to some 1,100 employees in preparation for privatization. And guess what ? Every employee knew then that if half of the population could go, then eventually, the 500 employee goal could become a reality. Notice had been given that job security at BTC could no longer be expected.
The general theory is that the 2002 election was lost by the FNM government because of the 1999 downsizing at BTC. Many of those who took the package had an expectation that they would be able to return to their jobs if their government was in power. The "no double dipping" policy, however, kept the 1999 numbers in check.
The depressed global telecoms market in 2002-3, and the new administration's lukewarm attitude towards privatization, meant that whilst privatization did not happen, and the employee numbers crept up by almost 100 employees, the employee count was mostly contained because it was accepted that a continued objective of the government (as evidenced by the "Bluewater deal" in 2007) was to privatize. It was acknowledged that no serious purchaser would buy or pay a competitive price for an overpopulated company.
Privatization preparation at the company continued and, again, everyone expected that whoever purchased BTC would further downsize the company because new technology was making many tasks less labour intensive. Some employees, however, because of the failures and delays in finding a strategic partner, decided that their prayers had been answered, privatization would never happen and so they settled comfortably into their previous expectations.
Finally, in 2011 after 3 years of more privatization preparation, when CWC agreed to purchase BTC, it was clear that the employee numbers were still too high by modern industry standards, and that a further downsizing was inevitable in order to achieve the right size for an entity in a competitive industry, particularly given the fact that there was still a cellular exclusivity which accounted for a huge portion of revenue.
The agreement, together with all of the other privatization documents were fully displayed on the government's website in February 2011 amidst much publicity and public discussion. There was no attempt to keep the details of the conditions of the purchase of 51% of BTC's shares by CWC a secret.
The 2011-12 downsizing was a voluntary separation exercise which ultimately saw almost 470 employees exit the company.
Many of those who left in 2011-12 had observed the 1999 downsizing and had been preparing themselves for the eventuality that their turn would come. Many embraced the opportunity to leave, having prepared themselves financially for early departure. They too left with generous packages.
And so the population of BTC moved closer to its "right" size, and the 1998 figure of 500 seemed to be very achievable.
The transition to digitized networks required fewer employees, and call centres and franchising of services ensured a smaller staff size. It was common knowledge that the expiration of the cellular exclusivity in 2015 would see a 40 to 60 per cent loss of customers to a new cellular company together with the accompanying revenue. And loss of revenue would mean that further downsizing would be inevitable.
And so, in early 2015, as the cellular exclusivity expired, a second voluntary separation exercise was introduced. Employees were apparently informed by the company that if sufficient numbers were not achieved then a redundancy exercise as provided for under the relevant articles of the union agreements would commence. And this brings us to the present.
We appreciate how all of this job uncertainty was stressful and depressing for employees but short of being one's father's company, nothing is promised and nothing had been promised in that regard at BTC since 1998. The wise employees, after 1999, began preparing themselves for the reality of downsizing and alternative employment beyond BTC.
Employers, as we have heard, run their businesses for a profit, and a large profit preferably. Only the government entertains subsidizing unprofitable entities. In 2015, however, the Bahamian public has no appetite for another Bahamasair or another ZNS, and with the Baha Mar fiasco and the pending BEC troubles, BTC should be way down the list.
Frankly, the Bahamian public is sick and tired of the pathetic complaints from the union leaders that the employer is being inhumane and unfair. Why do they think that the Redundancy Article is in the union agreements?
And the public has lost all patience with employees who they regard as spoiled and indulged for no good reason, and their general attitude that somehow, the many must pay the price for the chosen few.
The majority shareholder of BTC must do what it has to do in order to run a lean, efficient and profitable entity. It is as simple as that. Those union leaders who are carrying on would do no less with their own businesses.
The government must play its part by taking its heavy foot up off the telecoms sector and allow the sector to grow and flourish, thereby creating new job opportunities for the unemployed. The government must remove the stop order on the cellular liberalization process immediately and either cancel it and start again (good luck on that with all of the anti foreigner sentiments flying around) or conclude it. Better still,why not change the legislation and award TWO licences to Cable Bahamas and Virgin and let the market go with it. The public will benefit greatly with much cheaper prices.
Further, the government MUST remove itself from any significant ownership in BTC and in any other telecoms entities (defined as less that 15 per cent). The government's job is to set policy and create the positive economic climate to attract much needed foreign investment dollars.
The archaic and oppressive immigration restrictions that are choking the economy must also be revised and modernised, again, to encourage foreign investment in telecoms which is so crucial for that industry.
The onerous fees and taxes specifically imposed on telecoms providers which severely impact the cost of doing business and the number of employees must also be reduced.
Those are some of the policies by which advanced countries ensure jobs for their citizens.
Further, the government must become visionary and proactive and seek to provide the opportunities for small businesses and entrepreneurs to grow and succeed by diversifying the economy and creating a non partisan climate, a level playing field for all. The paternalistic government job mentality is destroying creativity and independent efforts in our population and, in 2015 dependency on the government should not be encouraged or tolerated.
Certainly a diversified, striving, thriving and sustainable economy makes it easier for everyone to find or create work.
Felicity L. Johnson is an attorney who was employed at The Bahamas Telecommunications Company from 1998 to 2013 as corporate secretary and ultimately senior vice president-legal, regulatory and carrier services. She has a particular interest in the telecommunications regulatory sector. She was also a lecturer and assistant ahairperson in the Humanities Division of the College of the Bahamas (1978-84) and has written articles on various topics during the course of her career.
Excellent article!
The widespread protection of selective groups of workers results directly in higher taxes and prices, and a loss of job opportunity for everyone else. Our prosperity as a nation is totally dependent on our international competitiveness. The failure of our leaders to admit this truth, and therefore to be able to explain to people why higher productivity is the only road to prosperity, is condemning the country to exactly what politicians claim they are saving it from; the loss of jobs.
Posted by: Bill | July 23, 2015 at 07:13 PM
An informative read, thank you.
Posted by: A Greene | August 01, 2015 at 04:44 PM