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SamoaTel Cashing in on Deception
Citizens’ Coalition for Accountability in Telecommunications
in Samoa (CCATS) is a non-partisan group of Samoans whose
goal is to provide public awareness on telecommunication
issues that adversely affect the public.
See their website: www.CCATSamoa.info for more details and
contact information.
How on earth did we suddenly end up with higher phone rates?
Were we given all the facts by SamoaTel before such a weighty
decision was made? We believe not!
Most decisions of such magnitude rely on submission of truthful
and factual information from statutory bodies such as SamoaTel.
What happens when this animating principle, the ethos of
truthfulness and the premise of trust is violated?
Case in point: the voice tariff rebalancing, i.e. the recent
stark price hike in our phone bills, which SamoaTel audaciously
has managed to shroud in congratulatory terms as a reduction
of rates and a significant savings to consumers and the country!
A recent article in Savali, (1) clearly shows SamoaTel’s
duplicitous language and skewed statistics.
Let us substantiate: Since 1993 SamoaTel’s international
voice revenues, which then, represented one-third of the
total revenue, have been steadily increasing (2). From an
economic standpoint this is a positive trend indeed, which
can be factually traced to the present day.
Misconstrued
However, propelled
by SamoaTel’s marketing alarmists, endowed with the
gift of denying, skewing, distorting or hiding facts to achieve
hidden agendas (more below) this increase of revenue is misconstrued
as a profitability factor reliance which calls for digging
the nails even deeper into to the access and local calling
rates, i.e. doubling our monthly rental charges and increasing
the rate structure from 11 sene per call to 4 sene per minute!
This, unbelievably steep and sudden increase of rates, is
further, unjustifiably, rationalized by portraying Samoa’s
local access and rental charges as one of the lowest in the
world: SamoaTel obviously is disconnected from the reality
of Samoa and the rest of the world. The local calling rates
have been comparatively (3) high considering SamoaTel’s
unacceptable service level, short distances within and between
the islands and the fact that SamoaTel is one of, if not
the most profitable telecommunication company in the world.
Notwithstanding the disastrous social and economic consequences
of such steep price hike for the people of Samoa, and the
fact that the per-minute charge structure hampers communication
amongst people, lowers business productivity and defies any
social-economic development model.
Rebalancing
This proposed “rebalancing” aims
to increase “non-contestable” areas of SamoaTel’s
business, claims the above mentioned publication. Translation:
we will rake in as much as we can since there’s
no one else to compete with us in the access and local
calling
arena! An intriguing proposition indeed!
The rest of this, so-called “Voice Tariff Rebalancing” includes
changes that appear as advantageous to the consumer and are
proposed to be used as a marketing tool to “increase
calling behavior”. Namely, local calling within the
islands, the implementation of off-peak overseas rates for
residential customers, and permanent reduction of overseas
rates for businesses (the only partial winners in this whole
shebang!) The real facts are: The national call rates across
multiple zones were grossly overpriced to begin with, considering
the short distances, and extremely low teledensity of about
2% in rural areas. Getting rid of the intra-island calling
zones is a drop in the bucket in terms of lost revenues for
SamoaTel: for the sake of equity, the inter-island national
calling rate (between Savaii and Upolu) should have been
abolished as well. The inter-island national calling plan,
still in place, is still the money-maker for SamoaTel in
this sector. As we pointed out previously, in a fully digitised
network, such as SamoaTel, it does not cost a sene more to
provide telephone services even to the remotest areas of
Savaii. So, this turns out to be yet another marketing opportunity
touted as a great accomplishment and big saving for the “people” and
the country! And regarding the international call rate change,
it was about time for SamoaTel to jump on the bandwagon in
providing permanent off-peak rates and lowering overseas
call pricing.
Worldwide
Despite a rapid and steep decline in overseas
rates worldwide, SamoaTel overseas rates, amongst the
highest in the world, had not significantly changed since
1989 – this,
despite repeated recommendations from expert consultants
for many years: the lowering of overseas rates and offering
permanent off-peak rates stimulates more usage and thus increases
revenues – from the economical standpoint this is really
the only way to go and this is exactly what SamoaTel has
done, albeit so late in the game – nothing really
to brag about!
For the cost saving statements (4) contained within the
above-mentioned document and the official SamoaTel written
rate change announcement – we request SamoaTel for
a public statement detailing these “cost saving” figures.
Stretching and manipulating data and statistics seem to be
a forte of SamoaTel. We restrain ourselves from exposing
the frivolous mathematics involved – we think everyone
is smart enough to see it. But then again, all you need to
do is to look at your bill at the end of this month – this,
despite the restraints that we now are putting on our time
to converse on the phone or to be online! (5)
So far, we have shown SamoaTel’s cunning scheme to
increase its revenues at our cost. This is nothing new! So,
what is the hidden agenda? Well, one that is not that hidden
is to jack up the prices of local calls as fast and as high
as possible to be comparable with the upcoming GSM mobile
rates – it appears that the GSM market is where SamoaTel
sees its ultimate fulfillment. Presumably, once the landline
call rates rise to the vicinity of falling mobile rates,
then there is a whole new arena of business opportunity for
SamoaTel and for other operators (who ultimately pay back
to SamoaTel). Isn’t SamoaTel already dismissing landline
basic telephone services as antiquated and expensive to set
up, and with 95% network coverage soon, as claimed by SamoaTel,
encouraging us all to jump on the bandwagon and get the latest
mobile technologies. Yes, and pay through our nose! Clever
indeed, but not without dire consequences for the economy
of Samoa as whole - we believe this signals a grim outlook
for the social-economic development of Samoa long term.
We ask the public to respond to, or comment on these issues
and thus start a public debate on the subject.
Notes and References:
1) Voice Tariff Rebalancing – Savali, 31 May 2006 – see
our website soon for a copy of the article.
2) Savali Article 19 Mar 2003: SamoaTel briefs Business
Community on progress.
3) Comparative analysis takes also factors such as economic
base, trends, outlook, region, currency and other aspects – not
just numbers - thus comparing Samoa with USA or New Zealand
is simply wrong!
4) Exact quote from the Savali article: “Samoatel
is cutting phone bills by an average of $194 per year – that’s
$3.5 million in savings to the country; SamoaTel is committed
to providing real value to the people of Samoa.”
5) Have you noticed now the uncomfortable feeling talking
to friends and family or customers with the relentless meter
running in the back of your mind, constantly adding 4 sene
per minute?
Also, let’s put things in perspective: even after much
public outrage and the resulting revised 1 sene per minute
ISP access charge, your 30 hour ISP plan (the most commonly
used plan) will incur $20 tala charge on your phone bill – incidentally,
with the original SamoaTel rate of 4 sene per minute it would
have been an outrageous $80 tala - vs. only $5 tala with
the old 11-sene-per-call rate (based on 40 connections)!
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