Flow Trinidad has justified its most recent price increase by stating that the cost of paying for international television stations has gone up. On March 1, there was an increase in the monthly rates charged for Flow residential digital cable services from $210 (VAT inclusive) per month to $225. Brian Collins, vice-president and general manager, Columbus Communications Trinidad Ltd, said these increases are normal in this industry. “With regard to the input cost that goes into pricing, we try to maintain as much of that without passing it to the customers. But on the cable side, the majority of costs come from international cable providers. The cable industry is unique in that you have increases every single year. There is never a year that goes by without an increase. All the international channels, like MTV, HBO, we have to pay a fee for each customers we have. The fees then goes into the price we charge our customers.”
Collins said the company was unable to say how much they pay for these international TV stations because of “confidentiality clauses” in their contracts. He defended these increases, saying it is only used as a last resort. “Since we entered market six years ago, we have tried to limit the number of increases that we pass on to the customers. We try to make ourselves more efficient internally. Unfortunately, the price increase which totalled almost 14 per cent over last few years was so high that we could not retain it any more, so we had to pass some of it to our customers. It is always last resort for us.” Collins spoke to the Business Guardian last Friday at Flow’s office, Victoria Square, Port-of-Spain. According to a statement posted online on Flow’s media room, “There have been significant increases in our network charges over the last few years. Yet, the increase being applied by Flow (7.0 per cent) is less than the annual rate of inflation and less than the increase in network charges.”
According to the February repo rate report released by the Central Bank, headline inflation, measured by the 12-month increase in the Index of Retail Prices, rose to 6.8 per cent in January 2012 from 5.3 per cent in December 2011. In media ads, TSTT Blink said there has been no increase in its rates. The ad stated: “This comes on the heels of the announcement by the competitor cable TV service provider of a rate increase of approximately 7 per cent, which took effect from March 1, 2012.” Despite Flow’s price increases, Collins has not seen any major fallout from customers. “We have not seen any major impact. Overall, our customer base has continued to grow,” he said.
According to additional information provided by Flow in an e-mail statement on Tuesday, Flow advised the Telecommunication Authority of T&T (TATT) of its rate increase.
Growth and product expansion Collins foresees strong growth in 2012.
“For the first quarter, we envisage strong growth across all our sectors in cable and Internet. I think that is primarily because of our product that we offer our customers. In 2012, we are looking at developing more strategic products and are more tailored to what our customers need,” he said. “In the beginning of February, we launched a new Internet product, 15 megabytes download and two megabytes upload, which is addressed to our gaming customers. That came about by interfacing with our customers and giving us feedback and a strategic alliance with the Gaming Association of T&T. For the rest of the year, we will be looking at specific products that our customers want.” Collins spoke about the popularity of high definition (HD) channels.
“That goes for our cable section as well. We are looking at expanding our HD channels. Currently, we have 22 HD channels. Over next nine months, we are looking at expanding that. There is quite a demand for HD content in T&T. Everybody is buying HD TVs. HD will be a big push for us in 2012.” He declined to give the exact size of the size of Flow’s customer base. “We do not give those figures exactly. We provide them to the regulator. But we are happy with the way things are going. We have seen very strong growth over the last few years. Our figures are very healthy, especially in the Internet size. That is partly due to the strong products we have,” he said.
Long lines to pay bills
In an e-mailed statement on Tuesday, Flow said that future expansion in retail outlets would unclog the bottleneck of customers having to wait for hours in long lines to pay their monthly bills, especially at Nicholas Tower, Independence Square, Port-of-Spain. “Flow has four payment centres in addition to more than 600 third-party payment options nationwide. However, monthly, as with other retail/service industry companies, we do experience an increase at month end, which coincides with our bill payment period. We are in the midst of expanding our retail footprint to assist in alleviating this challenge as well as exploring strategies to improve the customer experience.”
Collins believes that the Government’s information and technology communications (ICT) thrust is opening doors for companies that offer their services. “The Government is insightful in that it is pushing ICT and broadband access as one of the main drivers for diversifying T&T’s economy from oil and gas. We saw the giving of laptops to schoolchildren about two years ago and we have seen a dramatic uplift in the take up of our product because of that.” Collins said there has been strong growth among Internet users in T&T, which has made the country an advanced market for its services and products. “I think the regulators here have taken a light-handed approach to regulation. Internet penetration has increased from 23 per cent to 49 per cent in the last few years. So T&T has made huge strides in this way. The regulators must be commended for this.
“The Government realises it needs to diversify the economy through ICT and once it realises that, engaging the private sector is very important. They realise that Columbus Flow has an important part to play in that. A few years ago, we were viewed as a cable company; now we are viewed as a fully-managed ICT service provider,” he said.
Collins described Flow’s role as an “enabler.” “The mantra of our company is we don’t predict the future, we enable it. To allow this to happen, everyone must have access to the Internet. We believe our network is second to none. We will have our analog to digital conversion completed in 2013. The Government is also putting its services online. This is the sort of things that Government realises you need to entice people to take new services. Flow is now being looked as a potential enabler of ICT.”
Flow and the economy
Collins does not believe the downturn in the local economy has impacted the company’s performance. In fact, he believes that the services it provides actually assist businesses and the economy. “It has not impacted us directly. We are still growing as a company. We have around 600 employees. We intend to hire more people over the next two years. The products we offer make a difference in people’s lives, whether it is consumers or business people.
“In business, people look for ways to minimise costs. We can help facilitate that. So we can cut business cost by 30 or 40 per cent and we can take the risks out of this and invest in infrastructure, which allows us to become a solutions provider. So we can help businesses free up more money to invest in other areas. So we see ourselves as enablers trying to kickstart the economy again.”
Flow is expanding and targeting the small and medium enterprises (SME). “We are a large provider of ICT services. We are looking at extending those products into the SME sector, which is important for the majority of people. Sometimes they are neglected at the cost of larger enterprises. We can offer a solution and all the different bells and whistles that go along with it for someone with 5,000 employees or five employees. “Prices are one thing, but it is the quality of the service we are going to offer. Before they may not have had access because they needed certain equipment and technical expertise, but because of what we will offer, they do not need expensive equipment or the IT person that will cost $15,000,” said the Flow boss.
He admitted that because of the fast moving world of technology no one can accurately predict the future but said Flow intends to remain at the forefront. “Things are changing so rapidly. We want to become a facilitator of the next Google or the next Twitter or the next facebook. We are not going to be the company that develops those types of products but we will be the one that allows those products to be developed and consumed by our consumers in T&T. “We can guarantee that T&T will not fall behind the rest of the world. We will continue to develop our infrastructure and network to make sure whatever products we offer is far superior to what others offer. We will always be world class.”