November 22, 2018 / 1:05 PM / 23 days ago

Service? Don't rely on Venezuela's state telecoms firm Cantv

BARINAS, Venezuela (Reuters) - When Ceferino Angulo heard screams and gunshots one night last year close to his dairy farm on the western plains of Venezuela, he tried to call the police, but there was no phone signal.

A detailed view of a phone lines cabinet of Venezuela's national telecommunications company CANTV in Barinas, Venezuela September 24, 2018. Picture taken September 24, 2018. REUTERS/Carlos Eduardo Ramirez

He was not surprised. A phone tower, built by state telecommunications firm Cantv on his land to provide coverage to his local area outside the western city of Barinas, had stopped working.

The tower, set in rolling grassland on his 57-acre farm, was overgrown with vines snaking up its pylons. Its guardhouse was abandoned almost a decade ago and no Cantv employee had visited in three months, 54-year-old Angulo said.

“We’ve spent four years incommunicado. A telephone signal is one of the things we most need here,” he said.

In the decade since the government nationalized the 88-year-old firm, Cantv has cut investment in new technology, skilled staff have departed and thieves have pillaged its equipment, according to a dozen current and former Cantv employees and internal documents.

Venezuelan businesses struggle to operate because phone lines have stopped working, worsening a five-year economic crisis that has shrunk the Venezuelan economy. People find it difficult to access healthcare or sign up for new passports because they cannot register online.

A Cantv spokeswoman declined to comment. Cantv President Manuel Fernandez did not respond to emails and text messages.

Last year, Fernandez said on a government website that Cantv was a “powerful tool” to give telecoms access to people and build the socialist state. Internet use in the country had quadrupled since 2007, he said.

Cellphone connections are patchy across Venezuela, however, and people are reporting ever more network outages, which the government has blamed on right-wing saboteurs.

Barinas, also the area where former Venezuelan President Hugo Chavez lived and studied as a youth, has been one of the areas hardest hit by the deterioration in Cantv service. In some places, coverage has been completely lost.

Rusting service vehicles sit abandoned outside the phone company’s local headquarters, as it cannot afford new tires or batteries, the current and former employees told Reuters. Cantv’s own offices there often spend days without internet, they said.

Some of the rusted electrical circuits providing internet to Barinas homes have not been replaced since the early 1990s and several residents said they had gone over a year without a connection.

“There is a crisis of investment,” said Jose Luis Machin, Barinas’ former mayor.

A Cantv technician taking a Reuters journalist on a tour of the company’s infrastructure in Barinas said over 100 meters (328 ft) of copper cable had been stolen the night before from a bridge, severing the neighborhood’s connection. Thieves melt down the copper or even sell the cables back to Cantv, the technician and two other employees said.

For telecoms services, Barinas’ nearly 300,000 residents now depend on network terminals built during the past few years by Chinese telecoms firms ZTE and Huawei.

On one block, a ZTE terminal was considered so valuable that a guard from the National Bolivarian Militia, a branch of the armed forces, said he had been posted there to protect it from vandals.

“FROZEN IN TIME”

Cantv, founded in 1930, was re-nationalized by President Chavez in 2007 as he moved to consolidate his socialist revolution.

The company was once Latin America’s leader in the telecommunications sector. It was majority-owned by U.S. firm Verizon Communications and traded on the New York stock exchange. In the past it invested hundreds of millions of dollars in new technology each year, attracted top talent and paid them generous salaries, the former employees said.

Since its nationalization, they said, Cantv had filled thousands of vacated positions with unqualified staff. The company has stopped upgrading its servers and maintenance on its fiber optic network was halted, causing ever more frequent service disruptions, they said.

Fernandez said last year that, before its nationalization, Cantv was an elitist U.S.-controlled company which took its profits abroad instead of investing in the country.

According to the Speedtest Global index, Venezuela ranks among the worst five countries for both mobile and broadband connection speeds.

Cantv had 2.45 million internet subscribers, nearly 7 million fixed line subscribers and almost 14 million mobile subscribers by the end of 2015, according to internal data seen by Reuters. The country’s population is around 32 million.

Average salaries at Cantv are now worth less than $8 a month and pay often arrives late. People who oppose the ruling Socialist Party do not get promotions, employees said.

“The company is frozen in time,” Jose Maria De Viana, a former chairman of Cantv’s mobile phone unit, said.

Cantv publishes few financial details but a copy of its private results, seen by Reuters, for the January-October 2016 period shows the company can no longer fund itself.

It was short 2.72 billion bolivars, then the equivalent of $1.8 million, to meet its investment target and needed 390 million bolivars in “external funds” to help cover the shortfall, data in the documents showed.

Between 2013 and 2016, Cantv’s payroll for its 15,000 employees quadrupled as the government lifted wages to compensate for inflation, according to the report seen by Reuters.

Two executives with access to company data, who resigned in recent months, told Reuters that Cantv has to request funds from the central bank to pay its staff.

The company also suffers from the government’s insistence that it keeps its fees low, currently the equivalent of less than one dollar per month.

Cantv was dependent on agreements with ZTE and Huawei to supply equipment and staff and the firms were paid in dollars out of the Venezuela China Joint Fund, a bilateral financing program, the current and former employees said. Cantv sends its employees to China to receive training, they added.

President Nicolas Maduro has turned to ZTE, in particular, to implement technology projects. Last week, Reuters reported details of ZTE’s role developing a new smart card ID that critics say Maduro is using as a tool to monitor the populace and allocate scarce resources to people his government deems most loyal.

Su Qingfeng, the head of ZTE’s Venezuela unit, said in a phone interview that ZTE was not Cantv’s biggest provider and received no preferential treatment with contracts. A Huawei spokesman declined to comment on its relationship with Cantv.

Slideshow (5 Images)

Even Cantv’s pro-government union has complained about the company’s “serious problems.”

In a private letter to members last year, the Fetratel union chairman, Jose David Mora, wrote that Cantv could not obtain new equipment due to a lack of foreign currency. He said the company was deep in debt to Chinese firms.

“There is total impunity for those that have bled this company dry,” he wrote, citing “zero confidence” in the current leadership. Fetratel did not respond to requests for comment.

Reporting by Angus Berwick; Additional reporting by Francisco Aguilar in Barinas, Anggy Polanco in San Cristobal and Andreina Aponte in Caracas; editing by Dan Flynn, Phil Berlowitz and Rosalba O'Brien

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