Column: Job Losses In Telecommunications

June 8, 2017 | 19 Comments

[Opinion column written by Jason Hayward]

The Bermuda Regulatory Authority commenced operations in January 2013, just over a year after the Regulatory Authority Act 2011 was approved by Parliament. The Regulatory Authority’s principal functions in relation to any regulated industry sector, are:

  • to promote and preserve competition;
  • to promote the interests of the residents and consumers of Bermuda;
  • to promote the development of the Bermudian economy, Bermudian employment and Bermudian ownership;
  • to promote innovation; and to fulfil any additional functions specified by sectoral legislation.

The two industry sectors which are currently regulated include: Telecommunications and Electricity. Post-inception of the Regulatory Authority, the electricity industry remains a monopoly and the telecommunications sector has turned into a duopoly with the major market share held between Digicel and One Communications.

The telecommunications sector has undergone rapid change. We have seen Cable & Wireless, once a telecommunications powerhouse, reduced to a relatively insignificant player in the industry, fighting to retain what little market share it possesses. The Company is now named LinkBermuda and is a subsidy of a large Canadian company called EastLink.

A failure to innovate and introduce new products into the market has been one of the Company’s greatest flaws. After acquiring Cable & Wireless in 2011, the CEO Ann Petley-Jones advised that LinkBermuda will be increasing both the services offered and employment levels in Bermuda.

However, the complete opposite has occurred; service levels have declined and employment levels are at an all-time low. The local HR, IT and Finance Departments have all been outsourced and Quantum Communication has been dissolved after the Government allowed it to be 100 per cent foreign owned.

It is no doubt that globalization and the increased multinationalism of Bermuda’s telecommunications industry have severally impacted employment levels in the telecommunication’s sector. Digicel’s merger with BTC is another prime example.

It should be of concern to the Regulatory Authority that Digicel had communicated to employees that it will be outsourcing the BTC Contact Center by the end of this year. In February 2017, Digicel announced that it will be cutting its global workforce by 25%. Shortly thereafter, staff at both Digicel and BTC were offered Enhance Voluntary Separation Packages [EVSP] emanating from its Digicel 2030 transformation programme.

Employees had until March 22, 2017 to accept the package. Over a dozen employees had opted to take the package and their last day of employment was April 28, 2017. On May 3rd, 2017, employees were surprisingly informed that the BTC’s Contact Center will be closing by the end of the year. This closure would lead to further job losses in addition to the job losses resulting from employees who had opted to accept the Enhance Voluntary Separation Packages.

The actions exhibited by Digicel after its approved merger with BTC should be alarming to all. Their actions seem in direct contradiction to the merger approval letter dated May 7, 2015 to the Chairman of the Regulatory Authority of Bermuda Carl Musson by the than Acting Minister of Economic Development Michael M. Fahy. The letter stated:

In approving these conditions, I note the importance of the role that BTC has historically played, and continues to play, in Bermuda’s telecommunications ecosystem. These conditions are intended to prevent harm to public interest and ensure that the core objectives of the ECA continue to be met. In particular, they are intended to ensure that the merger will not result in any deterioration in the provision of basic fixed telecommunications services in Bermuda nor negatively impact employment in the sector, but instead will increase investment in the next generation technologies and employment, to the benefit of the citizens and residents of Bermuda.

In addition, the Regulators’ final decision published on May 11, 2015 stated:

Section 6.3.6 – The proposed transaction is expected to increase Bermudian employment and ownership

83. The Authority has some concern as to how the Proposed Transaction will affect the level of employment in the electronic communications sector in Bermuda over the next one to two years. However, the Digicel Group [Bermuda] has made representations to the Authority that it does not expect any job losses at the D-BTC Affiliate to result from the close of the Proposed Transaction and, in fact, intends to increase employment in the D-BTC Affiliate by as much as […] jobs in technology, customer service, sales and marketing after the closing of the Proposed Transaction with the new hires being predominantly Bermudian.

There is a major disconnect between what is taking place on the ground and what is actually promised by these companies seeking approval to merge. We have witnessed job losses at LinkBermuda, job losses at Logic, job losses at BTC, and job losses at Digicel. It seems that the Regulatory Authority either has no power to prevent the deterioration of employment in the telecommunications sector or they are asleep at the watch tower.

- Jason Hayward

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Comments (19)

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  1. Archie says:

    Interesting column, not sure what it has to do with the BPSU though

    • If Martin Luther King stayed behind his pulpit …………..
      @$$ #@£€

    • BPSU Chair at BTC Responds says:

      I know exactly what it has to do with the BPSU. There are private sector members of the BPSU who are employed at companies such as BTC and Link Bermuda, among others.

    • frank says:

      some of the people in the contact center are BPSU members

  2. Hmmm says:

    Not often I agree with Jason, but in this case I do. The RA’s job was to oversee Bermuda’s telecoms industry, but they plain and simple made BAD decisions, and believe it or not most involving BTC. The RA should know how to treat “representations”. Digicel have been cutting staff all across the region to help there bottom line, why would Bermuda be any different.

  3. Freshair Fiend says:

    The Bermuda Regulatory Authority has added little to Bda’s telecom space other than a new and costly layer of government.

  4. auslander says:

    Most of the above is to do with free market economics, not the RAB.

  5. inna says:

    Whine, whine and whine, chingas man!!

    It is no doubt that the BPSU/BIU dinosaur clearly do not understand the need for companies to continually evolve and change to keep up with the times, irrespective of industry. We are living in global times, and if moving a call center to another country saves the company a good chunk of change to spend on other things, then so be it!

    Would you rather the whole company close down rather than shed a few jobs? As my moma always told me half a loaf of bread tastes better than none!

    I know of a re/insurance company that has been through many many mergers and acquisitions. At almost every M&A point, job losses were realized due to integration inefficiencies, however, the company is now considered the largest P&C insurance company in the world as a result of evolving to keep up with the times!

    • seriously? says:

      You sound ridiculous. The company is saving a huge chunk to spend on thing like the CEO’s Bonuses. Keep accepting that “cutting costs” mantra big companies spew out and see where it lands you. Outsourcing may cut costs, but in most cases it also severely cuts the quality of service.

      Your tone hints that you have something against Jason. How about you acknowledge the focus of the article? The RA has been extremely ineffective so far.

    • wahoo says:

      This kind of thing would not happen under a socialist regime! We would borrow and borrow and borrow and deny the truth – very simple, you will see in 2025. Vote union.

    • Mr. Pamblin says:

      The RA has placed my job (Solar Technician)in jepordy.They have failed their mission. Their Actions are louder than every word in the Acts that put them in place to oversee telecoms and electricity sectors of Bermuda. Hoping they are getting paid for paying a blind eye to the underlying issue, because Bermudians are paying for the decisions these under qualified people are making. Don’t believe me just at your new belco bills break down. And That’s just what’s on paper

  6. Accurate says:

    ‘no power to prevent the deterioration of employment in the telecommunications sector’

    BINGO

    And although it’s stating the obvious – neither do you Mr Hayward.

  7. swing voter says:

    Its not just a venting exercise. Why do you detractors think IB set up here in the first place….good telecom infrastructure and great human resources to maintain the service. Why do you think telecoms sucks here now? Lack of reinvestment in infrastructure and less human resources on island that care! Brother Jason got it right. You cut the fat, meat, now you cut bone.

  8. Truth is killin' me... says:

    But, but, but money grows on trees!

  9. spider says:

    Not sure why Bermuda government doesn’t have a services tax on the value of jobs shipped overseas. Shipping jobs overseas only helps the bottom line of a few individuals who are shareholders. Meanwhile government still has to run people who lost their jobs need to be looked after. Companies have a social responsibility to the country they do business in.

  10. Truthhertz says:

    The real question is how you reduce the cost of doing business here, especially since the largest expense is labor.

  11. Dark Star says:

    Isn’t Digicel a massive Caribbean telecommunications company (started in Jamaica)—–Jason your fellow brothers in the islands are doing this—outsourcing jobs to people who can actually do the jobs. I am the first person to complain about getting somebody on the phone at HSBC from India but it is the way of the world——it is nuts how the PLP & Unions are so much like Trump and the Republicans and want to go backwards instead of forward

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