Citing, among other things, a $453 million decrease in revenue in the last fiscal year, TSTT has called in trade unions representing its workers for talks on restructuring. This was revealed in a media release on Monday.
The company blamed its losses on the covid19 pandemic and competition from new technologies, and suggested these negative effects would persist into the future.
TSTT said the increased use of digital apps such as WhatsApp and communications platforms like Zoom has resulted in the steady erosion of traditional voice revenue.
"In TT, fixed voiced calling in terms of minutes and calls have declined by 50 per cent over the past ten years, and mobile voice calling has declined by 20 per cent in the same period according to the annual TATT (Telecommunication Authority) market reports.
"In addition, the legacy costs associated with redundant technology in its existing operating structure continue to have a crippling impact on TSTT’s business and its results."
TSTT's revenue in the last fiscal year (up to March 31, 2021) fell by $453 million, or 18 per cent less than the prior year.
It blamed the loss on the pandemic plus economic and technological factors unique to the Trinidad and Tobago market as a direct result of the global digital revolution in the telecommunications industry.
"Regionally and internationally, networks are under pressure. Internet traffic is growing exponentially, but the price per gigabyte is declining almost as rapidly, and the result is a downward pressure on revenue growth and margins.
"TSTT has had to focus on aggressively managing its expenses over the past year as these trends intensified, more so than its competitors who have global cost-economies of scale."
The company said it had already tried several initiatives, chiefly a cost-cutting drive that included containment of non-personnel costs.
The release cited TSTT CEO Lisa Agard saying, “Given our current challenges, TSTT considers that it must now urgently restructure to remain competitive. We must move to an operating model that is more in line with industry benchmarks, and which gives us the ability to adapt and evolve with the constant developments in technology. This is our only option if we are to return to profitability.”
She said the industry has a new normal and TSTT has no choice but to adapt to it.
"Therefore, in keeping with the terms of our collective agreements, the employee representative unions have been invited to discuss the company’s future. We look forward to meeting with them in the coming weeks to see how best we can work together to ensure our collective success."
Newsday asked her if the company’s statement alluded to job losses. She replied, "As was stated in today's news release, TSTT has invited its employee representative unions to consultations on a restructuring of the company. As such it would be imprudent to comment on the outcome of the consultative process until it has concluded."
Union not surprised
Communication Workers Union head Clyde Elder on Monday told Newsday he was not surprised by TSTT's statement, as the union had been warning of such a move since last year.
"We've been indicating that TSTT has been looking to do just what they indicated they want to do now.
"Without saying that in so many words, it is clear they are going to further downsize and restructure and retrench employees at different levels of the company. We could very well see the decimation of the company as we know it, of course, if we are not careful with how it is done."
Elder said he would accept TSTT's invitation to talks and would reach out to other unions representing TSTT workers such as the Estate Police Association.
Chairman: Good faith in upcoming talks
The company’s statement quoted chairman Sean Roach saying, “As the covid19 pandemic persists and the business continues to evolve in step with rapid technological development, the impacts will have to be counteracted by even further cost-containment initiatives in expense categories..."
Roach said he looks forward to innovative financial and technological solutions.
"TSTT must become increasingly agile for us to maintain a competitive edge in the constantly changing world of digital telecommunications.
"Our plans for a more sustainable, competitive, and customer-focused future are currently being researched and a new strategy and direction is being designed for discussion with our key stakeholders.”
TSTT promised good faith in the upcoming talks, hoping to focus on revenue-generating steps and cutting operational costs.
"The company is ready to put forward what it believes to be a reasonable and workable operating model to best position it to survive during the remaining impacts of the pandemic and the new environment of continuous technological change that defines the broadband revenue business model.
"TSTT looks forward to engaging the representative unions to find common ground on the way forward."
Newsday last August reported that from fiscal 2020 to fiscal 2021, TSTT's revenue fell from $2.49 billion to $2.04 billion. These earnings translated an after-tax loss in 2020 of $277 million, which lessened in 2021 to a loss of $94 million. Agard confirmed to Newsday those figures in TSTT's audited financial statements for 2021.
In November 2018, Newsday reported TSTT retrenched 503 junior and senior employees – all members of the bargaining unit – within a wider total figure of 700, which included non-unionised employees and executives.
The then CEO Dr Ronald Walcott had alleged "high employee costs" plus an operating loss of $32 million in 2017 plus a $478 million loss in the first half of 2018.