The Bahamian economy has lost millions of dollars a year that was paid by visitors as a small Bahamian telecom start-up was forced out of business by a multinational operating here in contravention of national regulations.
Island Bell, formed by 39-year-old Bahamian Peter Lorandos seven years ago to provide automated call-billing services to local hotels, collapsed after a long struggle against Mexico-based BBG Communications.
It is a complex story and one that cuts to the heart of difficult debates over issues such as privatisation, government regulation and globalisation. But it is worth understanding as an example of corporate and bureaucratic deck-stacking against native Bahamian business ingenuity.
Island Bell provided an automated operator service (AOS) to local hotels. It gave hotels a revenue stream for operator-assisted calls by guests, bypassing BaTelCo operators but paying BaTelCo its going rate.
Island Bell was authorized by BaTelCo to provide these services and was earning about $20,000 a month from 18 local hotels, ranging from Atlantis to the Great Abaco Beach Resort. Mr. Lorandos invested almost $200,000 in startup equipment.
"Our call-processing equipment was installed at each hotel to intercept and process guest calls," he said. "BaTelCo would have to tie up umpteen operators to handle collect and credit card calls from hotel guests, so it was a win-win situation because BaTelCo was paid for the calls, we made money and so did the hotels."
Then, in 1999, BBG Communications turned up offering to buy out Mr. Lorandos. When he refused, BBG twice approached BaTelCo directly and was rejected as a foreign company. Later, a local company called OneWorld Communications appeared on the scene, headed by former BaTelCo employee Maggie Colebrook.
The company was created in June, 2000, by law firm Dennis Gomez & Co., though its registered office today is Christie, Davis & Co. It now provides automated operator services to all the local hotels that Lorandos once served. Its two shareholder/directors are Ms Colebrook and Andrew Forbes, a lawyer. The president and vice-president are listed as Rafael Galicot and Salvador Lambruso.
"Over the past two years, OneWorld has been able to take away all my customers via unauthorised billing practices," Mr. Lorandos said. "By billing hotel guests five per cent to 700 per cent over BaTelCo's approved rates they have been able to generate sufficient revenue to pay hotels large amounts of money upfront. At the same time, they are raping our tourists."
According to BaTelCo's regulations, only Bahamian companies are authorised to provide automated operator services to local hotels.
They must have equipment installed on site and not charge more than BaTelCo's published rates.
On its website, BBG lists The Bahamas as a country in which it does business and describes itself as "a multinational communications holding company serving diverse international markets but concentrating in Latin America and the Caribbean basin."
There is no other corporate information on the site and an email query was not returned.
OneWorld also has a website, which lists its address as Suite 106 in the Saffrey Square building in downtown Nassau. But the email contact doesn't work and the phone number is disconnected. A visit to Saffrey Square turned up no evidence of the company, and efforts to contact Ms Colebrook were fruitless.
According to Mr. Lorandos, BBG/One World is operating contrary to BaTelCo's regulations, which require equipment be installed on hotel premises to process operator-assisted calls, and that call rates not exceed BaTelCo's published operator-assisted rates.
BaTelCo's legal adviser, Felicity Johnson, told The Guardian: "It is our written condition/policy that the (AOS) equipment must be installed on hotel telephone systems to process calls and it is also a condition that BaTelCo's operator-assisted rates cannot be exceeded."
She said BaTelCo "would be concerned to enforce these conditions" and had done so in the past, but would not comment specifically on OneWorld or on how BaTelCo deals with violations by any AOS agent.
According to Ms Johnson, after BaTelCo's downsizing in 1999, it allowed companies such as Island Bell and OneWorld to provide services it was unable to provide because it lacked operators.
"They were not licensed as such," she said. "They were just working under an agreement. But there is a lot of technology out there that is difficult to monitor and control. We anticipate that the forthcoming rate rebalancing will have an impact on everything like this."
Meanwhile, Ed Fields at the Atlantis Resort told The Guardian "we require all of our operators to be in compliance with relevant regulatory bodies. We presume that OneWorld would have met our requirement in that regard."
But OneWorld gives hotel guests a U.S. number that forwards calls to an overseas operator centre for processing. The fees charged are more than 500 per cent above BaTelCo's approved rates. BaTelCo receives no revenue from the system, except the direct-dial rate for making the call to the operator centre.
When OneWorld started, calls were routed over toll-free numbers to the overseas operator centre. After Mr. Lorandos reported these to BaTelCo, they were cut off, "with no notification to the hotel or provider stating this was illegal. So they would simply get another 800 number and proceed as usual," he said.
After being cut off several times, OneWorld starting using regular toll-paid numbers and is now reportedly using cellular numbers.
Based on his knowledge of the AOS business, Mr. Lorandos estimates OneWorld/BBG is earning well over half a million dollars a month from hotel guests making operator-assisted calls in The Bahamas.
"I would have been happy to compete on a level playing field," he said. "I invested my money and abided by BaTelCo's rules and rates. They haven't invested a dime in The Bahamas and charge whatever they want, taking the revenue out of the country."
Mr. Lorandos says that over the past two years he has repeatedly raised the matter with senior managers and directors at BaTelCo, with ministers and MPs, and with the Public Utilities Commission. He has a voluminous file stuffed with copies of letters and complaints. He has charged calls on his own credit card to document the rate markups.
Last August he received a revised AOS agreement from Alfred Phillips, BaTelCo's vice-president of marketing, detailing the terms and conditions for providing the service. In his cover letter, Mr. Phillips said "we have undertaken to resolve these issues… the most disturbing issue was the complaint of overcharging customers. We have also specified that AOS must be automated as the name suggests and therefore the use of live operators is prohibited."
Mr. Phillips said that failure to comply "will result in termination of our original agreement without further notice to you."
Mr. Lorandos signed and returned the document last Aug. 23. Whether or not OneWorld signed the agreement, it is still providing services to hotels through its overseas call-processing centre.
Mr. Phillips did not return phone calls from The Guardian.
"I have gotten a complete run-around from everyone in authority οΎ— including those who had a lot to say about fronting during the last election. And now, I have no option but to close and write off that part of my life," Mr. Lorandos said.
By Larry Smith, The Nassau Guardian
