I just got this email from Mr. Peter Kaliaropoulos, the CEO of Batelco which I shall share with you in order to reach a consensus of opinion. Mr. K raises some valid points which need to be addressed too:
Dear â€œboycott Batelcoâ€ team,
I have visited your website and read many of your comments. I do understand the concerns.
I will defend the right of anyone to express his or her view about a matter and welcome the opportunity to offer you an alternative viewpoint to yours. I hope the exchange of information remains non personal, unemotional and is facts based. I also hope that my letter is made available to all your members who are visiting your site so they can read the alternative view to yours and make up their mind on this matter.
You claim in your website that Batelco is lying to its customers, we are misleading and our motivation is simply driven by greed. Of course I disagree and I am concerned about untrue statements made by your group which are aimed to smear and deliberately devalue the reputation of one of the most important companies contributing to Bahrain’s success.
Letâ€™s look at the facts.
Batelco has recognized that its current pricing for the use of the internet is too high by global standards. We developed a new range of prices starting as low as BD10 pm for 256Kbps and submitted them to the TRA. We are working with the TRA to review conditions imposed on the BD10 service. Once we have reached agreement we will launch this plan as well.
Our goal remains one of making internet access in Bahrain more affordable and at higher speeds.
With the new packages we are introducing, the facts are that:
– 100% of our existing volume customers will be better off both in terms of speed, volume and price/value;
– The vast majority, ie. 86% of existing Batelco customers on the Flat Unlimited packages will benefit from the new packages;
– 100% of Flat unlimited customers will be better off in terms of terms of speed;
– A number of unlimited customers, less than 14%, may not get any new benefit and some may be worse off with the new thresholds levels.
Batelco today has approximately 23,000 broadband customers.
In analyzing the usage of our customers over the 12 months in 2005, we identified that the majority of our unlimited customers have 256Kbps access. 91% of these customers have a monthly average usage of 2.2GB.
When we analysed all the flat unlimited users (256Kbps + 512Kbps), the average usage was 7.4GB at an average cost of BD40 pmonth.
We are now offering for BD 40 pmonth usage up to 15GB, twice the current average and at 1 Mgps speed. Alternatively, if a customer has the same average usage per month, they will stay with 8GB at 512Kbps speed and pay BD30 pmonth.
Previously we used to charge 30 fils/MB above threshold levels. Our new packages now charge only 10 fils/MB, ie. 66% off.
Therefore, approximately 86% of our customers will be better off in terms of pricing and access speeds.
These are the facts that have led us to conclude that we are offering better value to customers and making the internet more affordable for the vast majority at higher speeds.
Our analysis has been based on assessing usage patterns of 23,000 customers. You state that you â€œsurveyed 10 Bahraini internet users who you consider average usersâ€. Whilst I accept your findings based on these 10 users, I will allow the readers of this email to conclude if research based on 23000 users is more factual and not misleading versus a sample of 10 users.
Furthermore, because Batelco does value its customers we have introduced a new Customer Care initiative for internet users as follows:
– All customers will receive an email notification and will also get an SMS notification (if they have a mobile with Batelco) when their usage has reached 75% of their designated threshold limit;
– Also once customers exceed their credit limit as per the following levels, their speed will be reduced to 64Kbps and any usage at this speed will be free of charge for the remainder of the month:
– 512Kbps package at BD30 pm, once usage reaches BD 40pm;
– 1Mbps package at BD 40 pm, once usage reaches BD 50pm;
– 2Mbps package at BD 60pm, once usage reaches BD 70pm.
– The reduced speed will be implemented once the package threshold (ie. 8GB, 15GB, 20 GB is reached). At the onset of the next month their downlink speed will return to the normal designated speed of their package.
The Batelco Customer Care initiative is introduced to ensure that no customer uncontrollably spends more on the internet than their original intention and we believe we are acting very responsibly to protect our customers.
Of course if a customer informs us during the month when he/she may have reached such a limit that they wish to have complete open access to the internet, we will advise them of the extra cost of 10 fils/MB, record their request details on our CRM, ensure they are the account holders and satisfy their request.
Customers, not Batelco, will have the power to make a decision of how much they wish to spend on internet access and usage. Customers also today do have the ability to check their usage levels 24×7 by going to www.batelcoeshop.com.bh. They will continue to do so with the new packages. Batelco will not have the power to charge customers unlimited fees for exceeding their package threshold levels. Your claim that we will charge a customer for up to â€œ603 GB in a monthâ€ thus is not correct and unnecessarily misleads internet users.
We do care about customers not overspending on a service despite its unlimited usage and our Customer Care initiatives will protect customers. Other industries (for example financial institutions) have similar customer care procedures when it comes to credit card usage for the protection and benefit of customers whilst minimizing bad debt.
You state that transition to these plans is not optional but you also state that customers have choice of internet providers and you recommend alternatives to affected users.
Batelco like any other commercial enterprise conducts business with its customers on commercial terms and conditions. As is the case with most customer agreements in Bahrain and worldwide, it is standard practice to reserve the right to change, withdraw and introduce new packages.
Again, whilst we recognize that we are affecting less than 14% of our customers, you need to acknowledge that we are benefiting 86% of existing customers. There is a risk some of our customers will pursue other offers from ISPs, of course we are concerned. However, we will be developing alternative offers in the future. Every business has commercial risks and we understand that some customers may opt out for alternative offers. We regret this and will continue to review packages to win them back.
Regarding your comments about trying to stop illegal users let me make a simple point. If the internet is very affordable users do not need to share. We have made it known that we want to introduce BD10pm to allow everyone to have access to the internet. Low cost packages will address illegal usage. Also you need to acknowledge that when illegal users (small minority) who are sharing internet connection with many others and continually download, deprive others from using the internet at the performance they are paying for.
Batelco has admitted that some customers will receive little or no benefit, less than 14% of our broadband customers. We are acknowledging this fact but some of your statements clearly mislead the public when you state that all customers will pay more. I have explained above that this is not the case for the vast majority of our customers.
Your website also contains a lot of misleading information (eg. ADSL is losing money, crookless and brainless costing models, etc). I do not believe it is constructive to debate with you these unsubstantiated allegations and emotional comments. If you have proof of wrong doing please produce it formally so I can act upon it – general accusations and unsubstantiated allegations do not help.
I just wish to state that Batelco today employs extremely competent professionals, they use best practice costing models, our analysis is audited by external auditors and professional regulatory TRA officers with vast experience in complex analysis. It is unfair and unwarranted to imply such hard working people are incompetent. I respect your right to express your opinion but in this case, it is wrong.
In your statements you are also advocating the need for total unlimited packages. We do recognize that new applications will require additional bandwidth. Batelco will continue to research the needs of its customers and introduce additional packages to cater for these â€œbandwidth hungryâ€ applications as is the case with business users.
A number of companies do have unlimited offers but in the fine print of their terms and conditions do state that unfair usage will be limited to 10 GB or 15GB. Batelco has been upfront with our new packages rather than hide it in the fine print of commercial contracts.
Your need to get totally unlimited usage for a fixed price is a concept which needs commercial balancing. It is naÃ¯ve to conclude that users who download 7.4GB or 15GB or 150GB or 603GB per month should all pay the same priceâ€¦ You state that â€œyou should be entitled to a completely unlimited package without any constraintsâ€. This is extremely unrealistic. In the world today, â€œuser paysâ€ principle is fair and a sound sustainable business model â€“ companies should not apologise nor be defensive whether in telecommunications or other industries.
High users should pay more for a resource or a service versus low users. Of course, high users should pay â€œless per unitâ€ recognizing that economies of scale apply to high users of any product or service. I donâ€™t believe we can live in a world where, say, we pay BD40 a month for petrol but we can use as much or as little as we like; BD 40 a month for electricity irrespective how much we use or pay BD40 a month for a loan, irrespective how much we have borrowed. There are many such examples across various industries. No company can survive on â€œunlimited useâ€ of a resource for a fixed price. Access to the internet and internet usage is a resource in demand by many and yes, it does involve millions of dinars in capital expenditure to provide.
We are aware, for example, that there are â€œteenage users, heavily downloading from the internetâ€. Your survey sample of 10 also confirms that you are concerned about these specific users. How do we address the needs of these users?
Here is an invitation: letâ€™s form a teenage internet user forum which Batelco sponsors so these teenagers can help Batelco develop new internet services aimed at the needs of such a segment and/or improve the development of internet services in Bahrain for heavy usersâ€¦
Batelco has not ruled out the availability of an unlimited packages for ever. In such a forum, we expect both groups (teenage users and Batelco product & marketing managers) to share information and educate each other on user needs, accuracy of information, commercial models and constructive dialog on facts and reasoning.
I am genuine about this invitation for a joint development forum because I also believe it will serve as an informed usersâ€™ forum rather than your group making a lot of assumptions and offering unsubstantiated views and comments. I am not certain what assurances you want regarding your confidentiality and anonymity – I will guarantee such. I am prepared to understand what assurances you may need from Batelco to offer you such â€œprotectionâ€.
I am delighted with your passion and organizing skills to protest about the internet packages we are introducing and congratulate you for the effort you are making to openly debate these matters. I also respect your right to freedom of expression as I stated earlier and hope that such dialog is not based on inaccurate and emotional claims which may ultimately hurt your cause.
We respect the views of all our customers and our employees. We do listen and we always try to improve the quality and value of our services. We do employ intelligent and motivated people and we are creating a performance based culture in Batelco to better serve the needs of our customers.
We are investing BD21m on â€œBroadband Bahrainâ€ project to ensure Bahrain has world leading IP and internet access capability and make the internet affordable for all.
Significant investments have been made in infrastructure and services for the benefit of all customers.There is always room for improvement. We have kicked off â€œsix sigmaâ€ process reviews to improve quality and service and, reduce the cost of our services so we can pass benefits to consumers. In the last 12 months alone we have improved customer service, based on external research studies and have reduced the costs of many of our services despite lengthy submissions and negotiations with the TRA. We believe in â€œcontinuous improvementâ€ in Batelco and we aspire to do more to win the loyalty of our customers in an increasing competitive environment.
94% of our workforce are Bahrainis and we are proud of this fact. We do want to employ more talented Bahrainis and have introduced performance management to weed out non performers and make room for new talent.
Batelco today is a commercial organization and we do not apologise for working towards giving our shareholders a fair return for their investment in Batelco whilst delivering value to customers. Many companies make substantial profits which reflect the significant investments they have made over many years. Batelco managers are not greedy. We are professional managers and people leaders applying a balanced scorecard in the way we run a modern business. Balance between customer needs, employee needs, shareholder requirements and caring about the community we live in. There is always room for improvement in any company including Batelco.
We employ over 1600 people who in turn support many family members through their jobs. Batelco also donates millions of dinars every year to community and needy organizations right across the Kingdom. We are socially responsible as well as running a business which enables commerce and communications in the Kingdom.
Whilst you lobby for support of your specific need, please remember that damaging the reputation of a significant and important company in Bahrain through generic spread of misleading information and general boycott messages may indeed hurt far too many Bahrainis versus the benefits you are seeking for a few.
I have offered you an alternative, more powerful way to influence our product development and pricing decisions. Your call.
Chief Executive Officer
The first thing I have to say is thank you Mr. K for taking the time to write, I – as I am sure the rest of your services’ users in the island – are quite thrilled that you take our concerns quite seriously. We applaud your efforts, of course, and recognise the good that Batelco gets involved in in Bahrain from sports sponsorship to building community care buildings and projects. We also recognise the level of Bahrainisation your company has achieved and look forward to seeing even more Bahrainis filling the top-level jobs.
Our concern as far as the internet service is concerned is manifold, our fear you will understand, is due in part to the absence of a viable competitive entity which by default, due to normal business dynamics, can protect the end user. We do not understand the value-add that an organisation such as the TRA can produce in situations such as these as they do not have the public face your company has, and the perception at least of the TRA either plainly siding with the providers, or is operating under their shadow. In other words, we currently do not see the TRA as a consumer protection; of course, we do recognise that their role is to regulate, primarily.
Peter, as bloggers we do use the internet heavily, we know too for a fact that our visitors and guests most probably are heavy users too. We are concerned that we are part of those disenfranchised 14% who will suffer due to this change. You must realise that the a sizable portion of these 14% could also be regarded as the bleeding edge occupants of the internet, the very people who have harnessed the power of the internet and use it as service pioneers, using services other users have not woken up to: IP TV, file synchronization between computers and servers, video chat, entertainment, news, radio, streaming applications and the various other high-end applications which we have come to take for granted, it is some of these 14% who your company should befriend and solicit their input for future services and packages which you might consider introducing.
By your admission, those operating within the “thiefnet” sphere are minute and should not be considered within those 14%, those, you are more than welcome to prosecute through legal channels. We just hope that you will not generalise the blame, and get us legitimate users to suffer on their behalf.
What you have proposed – affordable low end packages – is very much appropriate for these users and hope that the TRA will grant you the acceptance to provision this service, this we hope will reduce if not completely eradicate this particular problem.
We also recognise that you are a business entity providing for-profit services. You are absolutely not at fault for doing that, and we have happily contributed to your success, and will continue to for the foreseeable future. Some of us are actually your shareholders, and we look to excellent returns on our investment. We are not naive in believing that services such as what your company provides should be provided for free, or even at break-even prices. We want you to make a profit, as only with that you will be able to spend to improve the service further. We are not against you making a profit.
Our fear; however, is simply that with the ceiling limited packages you have introduced you have impinged on our right to continue to be on the bleeding edge of the internet revolution. To us, this in non-negotiable. This is our common denominator with visionaries the world over and we will not accept being left behind the curve without a fight.
I have already explained how we are using the internet, and perusing my blog you probably would have realised that I regularly post videos and audio content available to my users. As a content publisher I am anxious that my users view my creative output without having to consider limitations on their internet uses. If that happens then what Batelco has done is discriminate specifically against the Bahraini user, you and I know that the majority of the world will not have that consideration as their connections are most probably better, faster and more reliable. Therefore, your new packages will impinge on my freedoms of expression because although I will be able to deliver content to the rest of the world who might receive the content without a second’s thought, my Bahraini guests will be at a disadvantage because of obvious reasons.
Peter, we urge you once again to please reconsider your current offerings, and if only a minority will continue to be heavy users of your service, and by your statistics even a smaller portion would ever get to set limits, we urge you to remove those limits.
Thank you once again for taking the time to write, I personally do appreciate your candor and your passion.