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Editorial & Column


Doing It Right The First Time


January 29, 2004
Copyright © 2004 CARIBBEAN BUSINESS. All Rights Reserved.

That’s how Cristina Lambert, the new president & CEO of Puerto Rico Telephone and Verizon Wireless, intends to win the hearts and minds of telecom customers on the island as the company strives to become "the most respected telecom company in Puerto Rico."

That’s a tall order, but she’s determined and we’re confident she’ll achieve her goal. In so doing, both customers and employees of PRT will benefit from having a stronger company that’s better able to meet the technological and business challenges that lie ahead.

Lambert has going for her the right vision for the company’s future in an ever-more-competitive marketplace. "Our mission is to transform PRT into a more efficient, market-driven corporation, one sensitive to what our customers want."

Good. That’s what private-sector businesses try to do every day: become more efficient as they satisfy customers. Otherwise, you lose out to the competition.

In the five years since PRT became a private company, it has undergone a radical transformation that, although incomplete, is going very much in the right direction.

It has had to strive for a change in corporate culture, from that of an overweight, over-layered government bureaucracy to that of a private, entrepreneurial, customer-service-driven company. Again, although not quite complete yet, it has been a change for the better.

Furthermore, the transformation has come during challenging times for the former government monopoly. Federally mandated deregulation has allowed the entry of private competitors. Ever-changing technologies have not only multiplied product and service choices for consumers but have allowed competitors to deliver them at always lower prices. The consumer, of course, has benefited, but the former government monopoly, no longer with a lock on the market, has seen its revenue line compressed ever more.

The answer? Become more efficient and invest heavily in new technology. Since it was privatized, PRT’s work force has been reduced by 28%, either by attrition or through early retirement opportunities, from 8,000 in 1999 to 5,000 in 2003. And the company has invested $1.2 billion, exceeding its original commitment by $200 million.

Can you imagine what the situation would have been if the company were still in government hands? First, the taxpayer would have had to cough up the $1.2 billion. Second, it is highly unlikely that any government administration, regardless of political party, would have been able—or willing—to streamline the company’s payroll as needed to face the competition in a deregulated marketplace. In short, a government-owned PRT would be in terrible shape to compete against the private-sector giants that have entered the local market.

And yet, it is remarkable that that transformation has occurred during a period of labor peace and stability. Both management and the unions deserve credit for that. Now one of the labor unions, still negotiating with management over a new collective bargaining agreement, is cranking up the heat—in an election year, no less—in order to obtain the best possible deal for its workers. That’s normal.

But in the wake of all the public discussion over the current administration’s failure to adequately oversee the private management contract at the Aqueduct & Sewer Authority and its decision to retake management of that agency, it is important for the public to understand and differentiate between the issues so we don’t throw the baby out with the bathwater.

The argument, heard again recently, that essential services, including water and telephone, ought to be in the hands of the people (presumably meaning the government, as opposed to a private company) is pure demagoguery. The delivery of services, whether essential or not, ought to be in the hands of whoever can deliver them better, more efficiently, and at a lower cost to the consumer. If it’s the government, fine. And if it’s a private company, fine too.

In our view, the transformation at PRT has been a change in the right direction. And with the new management’s vision for the future, Puerto Rico telecom consumers should see continued improvement in the years to come.

This Caribbean Business article appears courtesy of Casiano Communications.
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