Things in Venezuela keep finding ways to get worse. Because of acute shortages, people cannot find basics like toilet paper. Now, it is likely to be harder to make overseas telephone calls or watch pay TV.
The problem is this: The global drop in oil prices has made US dollars much more scarce in Venezuela — which is dependent almost totally on petroleum for hard currency. So local telecoms companies do not have US dollars to pay international suppliers.
Venezuelan President Nicolas Maduro’s leftist government controls the currency market and distributes US dollars to private companies as it sees fit.
The government owes local companies about US$700 million, which these firms need to honor obligations with foreign providers, according to the Chamber of Telecommunications Services Companies.
So as a result, for instance, the Spanish telecoms giant Telefonica is this week scheduled to temporarily suspend long distance telephone calls to countries such as the US, Spain, Mexico, Italy, Brazil, Colombia and Panama.
Mobile phone company Digitel, which is privately owned, has halted long distance calling services and international roaming since Saturday last week because it cannot reach agreement with providers on new payment timetables.
However, it is not just telephone services that are affected.
State-run television company Cantv, which provides cable service said it is reviewing contracts with content providers, which means there is less to watch on TV in Venezuelan living rooms.
“For two weeks now, I have lost six of my favorite channels,” said Isael Gonzalez, a 46-year-old motorcycle taxi driver and Cantv subscriber. “They were the ones showing movies and cartoons — so I decided to unplug the whole thing. What use is it if the channels I like are off air?”
Drisley Petaquero, 36, also said several channels had been cut from her father’s Directv pay-TV service.
“Especially the ones showing comics — there used to be five and now there are just two,” she said. “He complained to the company and they told him they were performing maintenance work.”
The state regulator, the National Telecommunications Commission, admits there is a problem and blames the lack of US dollars.
The government says Venezuela’s oil revenue went from US$37.2 billion in 2014 to US$12.6 billion last year, and the country is saddled with commercial debts of US$12.5 billion.
Companies in the country are desperate to raise rates.
Industry sources say that Telefonica’s mobile branch, Movistar, was given permission in 2014 to raise its rates by 35 percent, while inflation was running at 68 percent; last year it won a 35 percent rise, with inflation at 181 percent.
A basic home bundle — cable TV, a land line and wireless Internet is cheap in Venezuela: about 1,100 Venezuelan bolivares (US$111 or US$3.54 dollars depending on which exchange rate used).
Still, regulators denied local operators permission to rate their rates in February and last month.
The operators said they need a rate hike badly because foreign providers’ costs are rising in the wake of a 37 percent devaluation of the Venezuelan bolivar in February and because of rampant inflation.
All the debt and the delays in gaining rate hikes also mean the sector cannot make the investments it needs — about US$1 billion a year. So coverage and service quality are suffering.
With prices so low, Venezuelans are tripping over each other to sign up for cell phone and mobile Internet packages, but the industry cannot keep up because of the lack of investment, the chamber of commerce said.
So networks are likely to become saturated and service is likely to decline, the chamber said in a recent report.
Venezuela is one of Latin America’s largest consumers of mobile data.
The country has 65 percent penetration in cable and satellite TV, and 99 percent cell phone penetration, regulators say.
All this comes on top of the day to day problems Venezuelans face just trying to buy basic necessities like food and medicine.
his also stems from the shortage of US dollars.
The economy contracted 5.7 percent last year.
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