Venezuela’s 15-Cent Phone Bills Come Complete With No Service

(Bloomberg) — Anytime Margara Bermudez has to make a call, she rides her motorcycle to a tree about five minutes away from her home in a small town on the outskirts of the oil rich city of Maracaibo. That’s the only place where there’s enough signal for her cell to work.

Residents of Los Puertos de Altagracia have figured out that the spot is somehow a refuge from the growing dead zones that leave them unreachable most of the time, the result of a popular crime in the crumbling nation: stealing and vandalizing cellular antennas. So the tree, which always offered a welcome shade in heat that regularly surpasses 30 degrees Celsius (86 Fahrenheit), now fills up even at night, illuminated by people answering texts.

Documents indicate that there have been at least 2,000 attacks on Venezuela’s network of 6,000 antennas in the last last three years. The number includes incidents of vandalism — picking the equipment for parts, which can be resold — and outright theft. In 2018 alone, Telefonica SA subsidiary Movistar, the country’s second biggest operator, has reported 536 stolen. The robberies are adding pressure to companies struggling to survive amid soaring inflation, capped prices and a communications system plagued by rolling blackouts that are leaving millions of Venezuelans who live in smaller cities stranded.

“We are isolated, we are even distancing ourselves from our family. They complain that I don’t call them, but how can I?” Bermudez said from the famous tree. When she needs to make an online bank transfer, she drives there and calls her sister in Caracas to help her. Often, the call cuts off after just a few seconds.

State-run Movilnet, the country’s leading operator, and privately-owned Digitel have also been hit by the crime wave. The equipment stolen, which is often shared by the companies, is later resold for high fees, including power supply cables, copper parts and electronic components, according to documents seen by Bloomberg.

For companies, replacing that stolen equipment has become increasingly difficult. The government hasn’t delivered subsidized dollars for imports following the collapse in the price of oil, its main source of revenue. That, combined with the cap on what they can charge — the price of Movistar’s top mobile internet plan is about 100 bolivars, or some $0.15 at the black market rate, compared to a $17 price tag for a similar plan offered by the firm in neighboring Colombia — leaves them with no money to invest or improve technology.

“By charging 3 to 4 dollars a month we could start to recover the systems,” Jose Luis Rodriguez Zarco, president of Telefonica in Venezuela, told journalists on Friday, adding that Venezuelan fares are the cheapest in the world. “We are not on the verge of a collapse, but each time we are going to compromise more quality.”

Rodriguez said that the company has no plans to leave Venezuela, but is in constant need of help from its parent in Spain to continue operating. Consumption has increased 73 percent in one year while a third of his staff has left the country, he said.

Most of the money now goes to maintenance, including the recovery of stations targeted by theft and vandalism, according to documents seen by Bloomberg. Replacing one costs 600,000 percent more than last year due to crushing inflation that is at 1.7 million percent annualized over the last 3 months.

“There’s smuggling involved, so parts are resold in the Caribbean and neighboring countries,” particularly for copper conductors, microwave radios, motor generators and batteries, said Jose Maria de Viana, a former head of Movilnet in Caracas. “A risk like this wouldn’t be worth it in other country, but here people do anything for $10.”

For Venezuelans, being cut off from each other and the rest of the world is yet another blow caused by the deep economic crisis, affecting everything from banking transactions to police operations, causing glitches in daily commercial operations and stranding those needing emergency assistance. It’s already common to have phone chips from more than one operator and switch them around in search of signal (Bermudez has two.) But with the growing dead zones, it’s not much help. Widely used web-based services like WhatsApp are now spotty, as is access to news — the government controls all public TV channels and has blocked a number of private networks.