Phone system collapsing in Venezuela due to infrastructure failure

[GatoGordo]

Subsidy for telephony leaves Venezuelans incommunicado
Companies affiliated to the telecommunications sector can barely pay the payroll of the staff with the current prices of tariffs for data services, calls and text messaging

By RICARDO ZAPATA
DECEMBER 01, 2017 12:01 PM | UPDATED ON DECEMBER 01, 2017 12:04 PM

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One of the problems that the telecommunications sector has in the country is that the National Telecommunications Commission (Conatel), regulator of these services in Venezuela, is responsible for regulating the rates for each data plan, messages and calls. This has as a consequence that what is charged is not according to the needs of the companies linked to this sector.

The economist and business consultant Henkel García told El Nacional Web that telecommunications companies have limited access to foreign currency for exchange control in force in the country since 2003. What they charge only covers the payroll of workers , so the investment in technological products is left out.

"Part of these telephone services that are state-of-the-art are available in dollars and the Complementary Currency System (Dicom) has only auctioned 15 million dollars when, for example, the food industry has been given 148 million. The immediate consequence of this is that the necessary is not reversed and the service fails, "he said.

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http://www.el-nacional.com/noticias/economia/subsidio-telefonia-deja-incomunicados-los-venezolanos_213721

Background

There are for all intents and purposes, no hardline phone systems in Venezuela any longer, as that bit of national infrastructure hasn't seen any Chavista investment in over 17 years and is an anachronism in Venezuela.

Since CONATEL regulates rates (in a country with 4000% inflation), the mobile companies cannot invest in technology or maintenance, as to stay in business they must meet payroll. The alternative is to nationalize all these companies, and as anyone familiar with Venezuela knows, nationalization means DEATH of that business. The companies need access to hard currency to buy equipment and tech, since nobody (even the Chinese and Russians) accepts worthless Bolivars. The Chavistas don't have it.

[delisen]

1. Political Boom and Bust Countries

First The Big Greedy: people get sold out by and for the Profiteers, people suffer
Next The Big Bust: people turn turn to the Charismatic Leader/Strongman who claims to have the answers but doesn't, people suffer

[GatoGordo]

2. In this instance, the profiteers had their companies nationalized, then bankrupted

The last large multinational in Venezuela, Polar, is about the only thing keeping the population from starving.

Maduro would LOVE to nationalize Polar, because he hates the ownership (the "Vile Capitalist" Lorenzo Mendoza). The problem is, Mendoza is keeping Polar running by virtue of the fact that the vast amount of his business is outside of Venezuela (US, Mexico, etc.) Every bag of corn meal Mendoza sends to Venezuelans (Venezuela doesn't grow its own food any longer... the farms were nationalized/bankrupted) he loses money on, but it is subsidized by the profits from his businesses outside of Venezuela. He gets nothing from the Chavistas.

Maduro and the Chavistas don't have that capability. If they nationalize Polar, then Polar goes Tango Uniform in Venezuela. The Chavistas can't get access to dollars, so they can't buy the raw materials to keep the plants running. They would close down within a week, and Venezuelans would REALLY have nothing.

[delisen]

3. What a mess. n/t