By Randy Howard
THE liberalization of the local telecommunications market is not only good for consumers, but would also greatly enhance Barbados’ level of competitiveness vis-à-vis the rest of the world.
This was the argument made by Director of the consulting firm Ideas 4 Lease, Chris Halsall, in an interview with the Business Monday.
Halsall was very passionate when he made the argument, stating that “as long as our telecommunications rates as high as they currently are, we’re not going to be anywhere near as competitive as, for example, Mexico, India, and Thailand. There are a lot of places in the world with much better telecoms at much better rates.”
He was making this point regarding the issue of the current state of long distance telecommunications, the cost of which he believes to be too high.
He stated that “International voice is Cable & Wireless’ traditional cash cow” and that no one should be angry with them because their job is to maximise their returns. However, he is of the view that there needs to be a “true elimination of these outrageous long distance charges – and the only way to achieve this is with regulation.”
“If you have outrageously expensive telecommunications, you’re going to be at a disadvantage attracting foreign direct investment.”
“You can only sell sun, sand, and surf to so many people. Speaking personally, we in the telecommunications industry tend to be too busy to ever actually go to the beach. And we kinda miss our 10 to 100 megabit Internet connections to our homes and desks.”
Halsall made reference to the theory of competition, which essentially results in a greater selection of goods or services for consumers, at lower costs, compared to what the price would be if there was no competition (monopoly) or little competition (duopoly or oligopoly).
“At the end of the day, telecommunications should be a commodity – the carrier should not be making much money”, and by this he means that the company should not be getting away with the large volume of profits that would have been gained when there was no competition.
In theory, competition is supposed to drive down prices to a level where companies are essentially generating enough revenue to meet their operating costs.
“Retail rates should be very close to the cost of doing business. What we have here in Barbados, and most of the Caribbean, is a distorted marketplace with the consumer being disadvantaged. It is going to require political will for this to change.”
Published in the Barbados Advocate Business Monday, 2008.02.18. Reprinted with permission.