Interview with Mark Lizarraga, Chairman, BTL – Belize Telemedia Limited

02 Feb Interview with Mark Lizarraga, Chairman, BTL – Belize Telemedia Limited

What would you say are some of the strengths of Belize and its regional economy? As chairman of the country’s leading telecommunications provider, what are your strategic vision and goals for the company?

Belize is blessed and is open for business! Our country is differentiated by its uniqueness of being the only English-speaking country in Central America, its proximity to North America and its regional membership within the Caribbean Community. These together with a young, vibrant, and healthy workforce, bring vast opportunities for investment and growth in our country. BTL certainly continues to be at the very center of all of this.

The importance of the connectivity that BTL offers manifested itself during the COVID-19 pandemic and throughout the recovery period. With our modern infrastructure, consisting of the only Fiber to the Home (FTTH) network and 4G LTE Advanced mobile coverage both spanning over 90% of the country, as the backbone of our operations, BTL remains the largest telecommunications provider offering the best customer experience with the fastest internet speeds in the country.

BTL is very proud of the partnerships established within our vibrant tourism sector and the significant role we play. Our company has invested heavily on our FTTH network with over 90% Homes Passed, offering consumers and businesses super-fast broadband connectivity and reliability throughout the country.  We are equally excited to offer our services to thousands of visitors who come to Belize and   utilize our network for the duration of their visit. We play a vital role in keeping them connected at all times. Belize’s sustainable tourism industry is going to be very important moving forward, as one of the primary sectors of our economy.

We are very satisfied with our contribution to the business process outsourcing (BPO) industry. Belize is rapidly expanding in this sector that has achieved significant growth in the past few years. Our country has a very high call center and remote agents’ capacity making it an ideal investment opportunity. BTL is of course at the core of this industry as we provide BPOs and remote agents with the bandwidth connectivity required for them to operate their day-to-day activities. We have thousands of young people in Belize, working and providing services to customers all over the world.

We are constantly evolving and in so doing continue to diversify our offerings to the Belizean market.

Earlier this year we successfully ventured into the Fin-Tech industry with the introduction of DigiWallet – the first and only mobile payment solution that seeks to bank the unbanked and bring financial inclusion to the Belizean economy. We are targeting 40% of our population that are unbanked or underbanked. This is a fantastic opportunity for us, trying to bring, not only connectivity, but financial inclusion to everyone in our country.

In line with our vision of inclusivity, we are in the process of expanding our footprint this year to ensure that no one is left behind and offer accessibility to more rural communities. We have begun the rollout of new cell sites or coverage expansion in 32 locations. Our footprint will be bigger.  We’re seeking to increase coverage along the highways, popular tourism destinations, or those rural communities that are growing.  Our goal is to bring connectivity to the entire country, 100% in the foreseeable future.

We continue to engage with the Government of Belize, our largest shareholder. We remain committed to helping our government advance Belize’s National Financial Inclusion Strategy that, among other things, seeks to bring connectivity to as many of the rural areas as possible. The importance of this became very apparent during the pandemic when we were on lockdown and our children and youth remained out of school or on distance learning. It begged the questions; How do we bring that connectivity? And how do we bring teachers into the homes? How do we bring education into the homes? All these questions did not only highlight the challenges that we were facing but brought about many opportunities for Belize and for BTL.

As a relatively new player in the BPO industry, Belize has tremendous opportunity to grow. BTL welcomes the move to establish more call centers in Belize, particularly because we have the technology, infrastructure, equipment, international bandwidth capacity with redundancy, and the human resources in Belize to do it.

For the past few decades, BTL has been Belize’s largest service provider, making the highest impact in the country.We’re Belize’s National Telecom. Belize nationalized this company some years ago, but we’re not a monopoly.

Reflecting on the last two years, what were some of the greatest challenges you’ve had to overcome? In planning for the next couple of years, where will your focus be, and which areas within the company will you be prioritizing?

The main challenge that we experienced during the pandemic was the loss in telecom revenues. The health emergency had a severe financial impact. Businesses took a big hit, and it was no different for BTL. Our business revenues went down because there was no activity, primarily in tourism; we lost 40% of our economy overnight.

BTL responded early with bold strategies to balance the demand of all stakeholders focusing on protecting the economic health of the business thus positioning the company to remain profitable. The company implemented cost leadership strategies balancing capacity whilst reducing expenses to secure the present and ensure our future. Through strategic initiatives and well-coordinated efforts, the company was able to achieve a significant reduction in expenses. These included contract renegotiations, in-sourcing, cost efficiencies, and adjustments for structural overcapacity brought about by lower economic and business activity, both nationally and internationally.  BTL is thankful for the dedication from its internal stakeholders, who personally shared and assisted the company through this unparalleled challenge in our history.

We also had to rapidly adapt to our new remote-work reality and safeguard the health of our team while ensuring that our services and operations remained fully functional. We are a resilient connectivity company, and we can confidently say that we excelled in it. Our team is equipped with devices, so we were able to transition from our office setting to work from home quite comfortably. We conduct most of our work via Microsoft Teams and it served us well. We can have meetings, stay connected with our devices and contact one another instantaneously.

We’re focusing on expanding our services, expanding our portfolio, and diversifying revenues from core telecom streams.  DigiWallet is one area of expansion and priority. We’ve recently purchased a local company that will position us as the only Quad Play Service Provider in Belize; allowing us to provide not only home telephone, mobile telephone, and broadband, but now content. We are expecting to have 20% of our revenues coming from non-core telecom within the next five years.

We’ve also partnered with some international companies to bring technology and Artificial Intelligence (AI), so we can target our marketing. AI continues to inform us about our clients’ usage trends in terms of data, voice, or SMS which in turn allows us to offer package bundles, to meet the individual needs of our clients. This has helped us quite significantly.

We continue to place our efforts on cost optimization strategies and make improvements to our procurement processes to make them more effective. We’ve had to do these things and it’s worth it, it helped us. Like the rest of the world, we continue to be face supply chain issues stemming from the global crises, therefore this is an area that we continue to monitor very closely and address creatively to remain fully functional and operational.

The financial health and stability of the company remains at the forefront of our priority areas. The able, independent, and strong leadership of the new Board of Directors (BoD), representing the company Shareholder’s interest, continues to oversee the operations of the company. We’ve repriced our products to become competitive and less dependent on government business. It is important to emphasize that BTL is not a monopoly. As such, we’ve had to become competitive, efficient, and agile. Our new BoD’s commitment and determination has proven fruitful with a significant increase in profit after taking office and we’re expecting to almost double our net profit year over year at $16 million for this financial year.

The culture of the company and our BoD has been to become very transparent and accountable. We’ve introduced good governance measures. We’ve got members of the BoD involved in subcommittees of the board, in areas of technology, human resources, and internal audit. We have a totally independent internal audit team that reports to a subcommittee of the board, not to the chairman, not to the CEO, but directly to the board. We want the transactions of the company to be transparent.

We want to continue employing good governance tools and mechanisms that really are needed for any company to become efficient and profitable. We focused a lot on that, we’re proud of it, we’re seeing the results, and this is the direction that we are heading towards.

In your recent AGM, you spoke of the company’s resilience in the face of the pandemic – how has the pandemic impacted the company’s main projects, and what steps have you taken during and after the Covid crisis to mitigate the impacts on the company’s operations? What are some of the new opportunities that the pandemic introduced to Belize’s telecommunications sector?

We focused on the basics; on efficiency, bringing value to our customers, rebranding our product lines, and value bundling our products. We focused heavily on cost optimization because revenues took a hit, and we prioritized diversification and identifying ways of becoming more relevant in connectivity. This included focusing on our B2B and B2C clients. We’ve also invested our time in strengthening key positions that we had gaps in, where we had missing rungs in our ladder. Succession planning continues to be major part of our strategy and goal.

In all of this, we settled an outstanding debt with the Government of Belize that our BoD inherited. We retired $21 million in debt; turned the company around and improved the profitability. We’re bringing new products to the market, and we’re expanding our footprint, all in this health and socio-economic crises that we are in, and we are proud to have achieved so much in such a short time.

We’ve focused on improving customer experience through the customer journeys by redesigning processes, digital transformation, Omnichannel and customer experience measurement and analysis. Many still perceive us to be a monopoly, because we have the government as the largest shareholder, but we are determined to change that view. Our focus is having a dedicated and customer centric workforce and giving the best in service and value to our customers. Every customer is important to the company, and we recognize that.

Additionally, we’re working on engaging our workforce and increasing our Employee Net Promoter Score (eNPS). We want an engaged and satisfied workforce for many reasons, primarily because they’re our most valuable assets and they are the drivers of the company. We’re happy to see that our eNPS has improved in the last year. We have a very dedicated and a very engaged workforce and we’ll continue to make them a priority and improve the overall culture of our company.

At the same time, we’re focused on returns for investors. This company needs to pay back the government for the investment that it has made in BTL; our shareholders need to get their return. They were getting minimal returns over the last few years. We’ve retired debt, increased ROE from 3% to 8% in our first year, and we’ve set a target of return on equity, to be 12% by the year 2025. We want to diversify our gross revenues by 20% from core telecom in five years.

We’ve set ambitious targets. We’ve met them for the first two budget years. I am confident that we will continue to perform, and this will be reflective on our annual revenue growth in the years to come.

You’ve recently acquired the cable company, Alternative Networks CTN, as part of the company’s goal to increase returns on its investments and expand its streams of revenue. Could you share more about the significance of this acquisition, and how this move will contribute to the increase in revenue and profitability of the company? How will CTN’s service offerings, like SWITCH TV, complement that of BTL?

BTL has invested our $100 million in our fiber infrastructure via which we have 90% Homes Passed countrywide enabling substantial capabilities for connectivity. The more services we provide to our customers on this one network, the more efficient we are in providing services to our customers.  This, combined with our vision to remain competitive and unleash the innovation potential of the company, brought us at the decision to purchase ANL.

Globally, telecoms are finding ways of diversifying and remaining relevant in the volatile landscape in which we find ourselves. There is a trend of telecoms moving towards becoming Quad Players and there are proven track records for so doing.

This is exactly what we will be brining to the Belizean market in the coming weeks. With the launch of DigiTV, we will be allowing new and existing customers of BTL the opportunity to maximize the use of our readily available and capable network infrastructure, while ensuring that our shareholders receive that return on their investment on our fiber network.

What are your thoughts on Belize as a destination for FDI in the post-Covid global economy, and why should Belize be on the radar of international travelers, workers, and investors today?

Another important pillar of the Belizean economy is agriculture.

We are fortunate to have agricultural land and pristine natural resources, a major challenge for some countries of the region. This opens opportunities for Belize to accelerate the Caribbean’s agriculture potential and address food security threats. Our country produces more than 50% of our own food, while some of our Caribbean sister nations import 80% to 90% of all food consumed. Belize is taking a leadership role to champion and advance CARICOM’s Agri-Food Systems Agenda. Our country is well poised to offer investors all the benefits that come along with the CARICOM Single Market and Economy which remove barriers to trade, inclusive of import duties and tariffs for all goods produced in Belize and other Member States, an important incentive for investors to develop interest in Belize.

As part of the Government of Belize’s redoubled efforts to increase sustainable agricultural productivity and production for the promotion of investment and private sector involvement, it engaged the Government of Mexico to successfully negotiate and sign off on bilateral agreements in agriculture and trade. This was an historic achievement for Belize considering previous unsuccessful attempts to do so which had prevented Belizean agricultural products to enter Mexico at competitive prices. Today, Belize can export agricultural products, including cattle, into the Mexican market free of tariffs. This opportunity opened the door incredibly for Belizean products to supply a population of more than 131 million. Here we are, a little country with a population of 412,000, having access to that huge market, creating optimal investment conditions for investors.

Belize continues to have traditional crops like bananas, citrus, and sugar cane but increasingly continues to see investment in non-traditional areas like soursop fruit farming. Likewise, we continue to witness the introduction of value-added practices such as with the production of coconut and coconut water.

In today’s reality with food shortages, with the challenges that we have globally, Belize has tremendous potential in developing its agricultural export capabilities. This certainly presents opportunities that will be with us for a long time, because as things become bogged down in Ukraine and all the other geopolitical issues that trouble us, Belize has the capacity to produce.

BTL is prepared to contribute to the significant advancement in this sector through the use of digital applications and technologies that can facilitate cooperation across value chains, support farmers and offer opportunities for innovative Small and Medium Enterprises for a more efficient, sustainable and competitive industry.

We welcome investors to take a closer look at what Belize has to offer in agriculture as well.

How are you currently attracting FDI, and what are some of the investment opportunities and incentives available within the company and in your particular sector as well?

BTL now focuses on Return on Equity (RoE) to ensure that investors receive a return on their investment. Through this shift in the management of the company’s performance, we are aiming to improve RoE from 8% to 12% within the next five years.

Many of the solutions and products that we currently offer and those that we are introducing into the Belizean market require notable investment, financially and resource-wise, to develop and implement which of course present opportunities for partnerships at the international level. We have successfully established partnerships with US-based companies to expand our product offerings in that market, mainly aimed towards the Belizean Diaspora in the USA. This allows them to pay telephone bills for their relatives back home, or send TopUp to their family members in Belize, or allows them to recharge their account prior to visiting Belize. A more recent partnership that we established was with a Canadian company to provide a cloud-based solution to power countrywide access to mobile financial services with the introduction of DigiWallet.

This July we powered down the last legacy switch at BTL, marking a major milestone in our company’s history. Our Legacy System Decommissioning exercise took us less than three years to achieve, and we can now proudly say that we have migrated all our customers to our future-proof fiber broadband technology. With the successful completion of our legacy decommissioning, we have quite a substantial amount of physical space available and the adequate backup systems in place that can offer cloud services. This is another area that we will be directing our attention to, and we are open to partnering with international investors to this end.

We have partners that continue to bring more cost-effective solutions to us with whom we have developed solid working relations with, and we’re always open to new partnerships that will support our efforts to offer new solutions to our customers.

We have established a revenue sharing business model at BTL. By offering a revenue sharing plan to existing and potential investors, we offer a mutually beneficial tool and much more attractive investment offers while ensuring that we increase sales and share costs.

BTL is ensuring that anyone who makes an investment with us can have that level of certainty that it will be worth their while.

What is your final message to the readers about doing business in Belize?

Belize is open for business! We are a resilient country and people. We have been tested and we have survived.

The new administration led by the Hon. John Briceno, Prime Minister of Belize, brought firm leadership; leadership that was willing to make tough decisions required to turn the heavily impacted economy around. We are seeing the results today. We’ve come through the worst of it. Belize has not only survived, but we’re also rebounding.

There is a myriad of opportunities for investment in Belize. As the leader in telecommunications and about to become the country’s only Quad Play Service Provider- offering telephony, fixed internet, mobile internet, and content – BTL will continue to have a substantial and important influence on Belize’s economic development and activity. BTL is the backbone of connectivity, and we are open to forging new partnerships to successfully expand our product offerings and contribute to the development of Belize. We’ve always prided ourselves for having very good communication services in Belize, and it’s going to keep getting better. We promise you that!