Thursday, July 14, 2011

Defend Our ETB! (Just Don't Ask Why)

Carrying a flag in today's march: ETB is Colombia!
'Saving' ETB, Bogotá's telephone company, from privatization, has become a rallying cry for the city's left. A bunch of leftist groups, as well as others, marched down Seventh Ave. this afternoon in protest of the company's possible privatization.

Throughout Latin America, publicly owned companies have come to represent sovereignety and nationalism. When I lived in La Paz, Bolivia a decade ago, nationalists defended 'our proudly Bolivian' public telephone company from privatization - even tho the company took more than a year to install a phone line, charged $1,000 for the privilege and changed people's phone numbers so frequently and randomly that their own phone book was useless.

Communist newspaper 'Voz' says:
 'Whoever is with ETB, is with me!'
Bogotá's own company is not nearly so disfunctional, but does have great failings. I had Kafkaesque experience when they added a unexplained charge to my phone bill. ETB's own employees agreed that it was unjustified and told me that many other customers had had the same problem. They helpfully removed the charge - but it reappeared the next month, and the month after, and the month after- until I finally had to pay a charge which everybody agreed I didn't owe.

That's a micro problem. More broadly, the company's Internet service is anemic, its repair service is mediocre and its core business, fixed-line telephone service, is slowly going the way of camera film and the printed newspaper. It's no surprise that, while ETB is still profitable, its market share and profitability are both falling - profitability by 50% since 2007(And its market share is protected by the fact that in many parts of the city, such as where I live, they are the only available telephone provider.) Analysts I've read seem to agree that, unless ETB recieves more investment soon, it will lose out to bigger and better managed competitors. ETB already tried to get into the celular phone market and lost the competition and sold its subsidiary.

Colombia's had disappointing experiences with privatization, including that of Telecom. And it's got successful publicly-owned companies, including EcoPetrol and EPM, Medellin's public services conglomerate. But ETB doesn't look like it's in any position to repeat the success of EPM (check out their Wikipedia entry, apparently written by EPM's own p.r. office), a huge, highly diversified company. I wish that it could, as EPM's profits have helped Medellin transform itself into a modern, sophisticated city.

Billiard hall owners participated in the march, protesting a law prohibiting liquor sales after 11 p.m.  Apparently, being able to sell intoxicating liquors at all hours is patriotic and perhaps even leftist. 
ETB, in contrast, appears to be losing value, and might eventually cost the city more than it's worth. In today's march, I heard talk about not giving the company away to foreigners, to keep its profits in the country, to protect Colombia's sovereignty.) While Colombians justifiably don't want their revenues shipped overseas, in this case, this looks like a very short-sighted perspective. Wait much longer, and there won't be any profits for anybody. Often, too, these publicly-owned companies have overly-generous payrolls and underly-demanding work conditions. Finally, if Bogotá wants to be competitive, it needs to provide good telecom services - not the weeks of defeaning static which we and our neighbors recently had to endure for weeks, despite repeated calls to ETB's service lines.

Lots of communists participated in the march. When your allies
have a proven  successful business  model like this one...
More of the communist contingent.

A wall graffiti declares: 'ETB is not sold.'

By Mike Ceaser, of Bogotá Bike Tours

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