Venezuela Telecom Operators Struggle to Overcome Power Failures

(Bloomberg) -- Workers at Venezuela’s privately owned mobile service providers are scrambling to keep signals up after a five-day nationwide power outage, forcing some employees to drive around the capital in search of diesel to refuel power plants, according to accounts from employees.

Many Venezuelans are isolated after a massive power failure unplugged almost the entire country since March 7. In the capital Caracas, cars double park on the side of highways and people gather in public squares where mobile signal is strongest. To confront the crisis, workers at Telefonica SA’s Movistar unit have been sleeping in makeshift camps at one of its offices after 48-hour shifts, one of the people said.

Venezuela Telecom Operators Struggle to Overcome Power Failures

While most towers operate on diesel when there’s a power failure, the fuel has become difficult to find as the blackout drags on, the people said, declining to be named discussing internal operations. Even water used to keep power generators cool has become scarce. The situation is more critical in cities like Maracaibo, the capital of oil-rich Zulia state, where lights were off until Tuesday.

Movistar didn’t immediately reply to a request for comment about its contingency plan.

Theft and vandalism at the mobile towers, which have valuable materials like copper stripped and sold overseas, have weakened a backup system for all operators, including state-run provider Movilnet, the country’s largest. Restricted access to dollars at official exchange rates have kept Movistar and Digitel from importing or maintaining critical equipment for years.

President Nicolas Maduro declared victory on Tuesday evening in what he described as an attack by the U.S.-backed opposition on the electrical grid. He’s urged the government to investigate National Assembly head Juan Guaido, who in turn, has criticized the regime for blaming its failures on far-flung conspiracies and neglecting maintenance and investment in power generation and distribution.

Movistar used social media postings this week to urge users to ration their use of services to avoid saturating the network due to excessive data consumption while also offering 24 hours of free text messages. 

Weekly demand for backup energy has increased five-fold in the past three years due to electricity problems. About 70 percent of Movistar’s budget in Venezuela goes to maintaining current equipment or replacing parts that have been stolen, Jose Luis Rodriguez Zarco, president of Telefonica in Venezuela, said in December.

While Movistar should invest between $50 million to $200 million a year to operate in the country, it can barely invest $6 million, Rodriguez Zarco said. Government constraints on how much the operator can charge means the price of Movistar’s top mobile Internet plan is about 400 bolivars, or some $0.12 at the official exchange rate, compared to a $12 price tag for a similar plan offered by the firm in neighboring Colombia.

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