The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Fears of further job losses at the Bahamas Telecommunications Company (BTC) were raised last night due to the planned imposition of a new “centralised” business model, which will help its controlling shareholder realise a further $24 million cost saving.

Bernard Evans told Tribune Business that he would warn Bahamas Communications and Public Officers Union (BCPOU) members that “the road looks rough for 2016 and beyond”, after this newspaper informed him of Cable & Wireless Communications (CWC) plans.

Senior executives at BTC’s controlling shareholder, in unveiling their 2015-2016 half-year results yesterday, expressed delight that potential group-wide cost synergies had increased by 47 per cent over original estimates.

These have now been upgraded from $85 million to $125 million over the three years to end-April 2018, a gain of $40 million, with BTC set to play a not-insignificant part.

Some $24 million, or almost 20 per cent, of CWC’s forecast ‘cost synergy’ savings, will come from the imposition of its new ‘centralised’ business model on both its Panama and Bahamas (BTC) businesses.

Slides accompanying CWC’s results presentation described the new business model as “centralisation of core back office functions and increased focus of in-market resources on commercial activities, focused on Panama and the Bahamas”.

CWC appears focused on Panama first before turning its attention to the Bahamas, but if what has happened in the Central American nation is any indication, BTC and the BCPOU line staff union need to brace for further redundancies.

CWC’s results presentation showed that a $3 million savings was achieved in the six months to end-October 2015 by reducing Panama staffing levels by 110. And a further $18 million is set to be gained there by the April year-end as a result of a further 140 job cuts.

Perley McBride, CWC’s chief financial officer, told analysts at the results conference call that the “roll out of the new model to Panama and the Bahamas should result in further savings”.

He added: “Now that we have developed our new operating model with centralisation of core support functions and commercially-oriented business units, we have identified $24 million of synergies as we roll this out to Panama and the Bahamas.”

Mr McBride said the earlier “headcount reduction” in Panama and at BTC this year had contributed to CWC incurring $43 million in ‘exceptional’ expenses during the six months to end-October.

BTC’s staffing levels have dropped by 8 per cent year-over-year as a result, and now stand at 719 compared to 785 in 2014, suggesting that 66 persons have left the incumbent carrier.

Mr McBride’s comments, coupled with CWC’s plans, not surprisingly did not sit well with BCPOU president Mr Evans, given that they imply further job cuts and uncertainty for BTC staff and union members.

The ‘centralised’ business model appears to suggest a consolidation and outsourcing of functions to CWC regional centres, and Mr Evans said there would soon come a time when the Government - as the other BTC shareholder - would have to tell its partner: “Enough is enough”.

CWC seem likely to start implementing the ‘new business model’ on BTC in the 2016-2017 finanacial year, which starts next April.

Mr Evans suggested it was likely talking about functions such as the customer contact centre, and added that the union would inform its members of the likely consequences from CWC’s plans at tonight’s meeting.

“We are mindful, and we are very, very concerned,” Mr Evans told Tribune Business. “We have to be concerned.

“I will share with my members that the road looks rough going into 2016 and beyond; scaling back and reducing operational expenses by $24 million.

“And with a new entrant coming into the mobile market, that’s going to further reduce revenues. We’re going to have our work cut out for us.”

Mr Evans pointed to the likely dramatic effects on BTC’s cash flow and revenue streams from Cable Bahamas being selected as the preferred bidder for the second mobile licence, warning that it might affect staff “benefits we enjoy at BTC”.

He pointed out that 72 cents of every $1 in revenue earned by BTC came from its soon-to-expire mobile monopoly to illustrate the impact competition will have on the carrier.

“We have grown to expect that this is the norm,” Mr Evans told Tribune Business of CWC’s plans and potential further job cuts.

“We asked management after the last downsizing if they have an optimal size of operations; a minimum headcount or the minimum amount of persons they see themselves operating with.

“We wanted to get some idea, some kind of confirmation, of a headcount they would not go beyond. Management are reluctant to put that in writing.”

Mr Evans likened the change in BTC’s business and culture since it was privatised in 2011 to “a 180 degree turn”, and added: “Everything we warned the Government about has come to fruition.”

The union chief said there would soon come a time when the Government has “to look out for the self-preservation and way of life of the people”, and block further moves to take jobs away from Bahamians to other countries.

“Somewhere along the line, the Government has to say: ‘Enough. You’ve done enough. We can’t let you take more jobs from here’,” Mr Evans told Tribune Business.

While “mindful that the company has to survive”, Mr Evans said neither BTC nor CWC were cutting back on dividend payments to shareholders.