TSTT CEO: Retrenchment of 468 saves $12m a month
THE retrenchment of 468 TSTT employees is saving the company $12 million a month, said TSTT CEO Lisa Agard. She made this revelation while engaging journalists at a workshop on covering technology and the changing landscape on Tuesday at the TSTT hospitality suite, Queen’s Park Oval.
Responding to questions, she said the restructuring was part of many different measures that had to be taken in the face of significant decline in revenue from a changing mobile landscape.
“People have this misconception that telecoms companies must have done fantastically well during covid. No. In fact, because people were stuck at home, they were not going out so they weren’t topping up (purchasing pre-paid data). That caused our mobile business to decline,” she said.
“There was an uptick on the fixed broadband side because everyone needed a broadband connection, but the increasing revenues from broadband use were insufficient to offset losses we saw on the traditional mobile and fixed lines.”
She said mobile switch voice calling declined by 21 per cent between 2017-2021, a phenomenon which was exacerbated because of covid. Additionally, international incoming and outgoing calls plummeted by 81 per cent and 83 per cent respectively over the past ten years.
“The traditional way of doing things is no longer relevant or applicable and we have to struggle to change our business models,” she said.
“When you are forced to change your business model, you have to take a critical look at your business. The first thing you do is look at your costs.”
She said the company looked over its operations in the first part of its exercise and were able, through assessing and streamlining operations to reduce costs by $160 million a year. She said they then looked at the “people costs.”
“The reality is we were out of whack in terms of international benchmarks, in terms of staff costs, even with local competitors we undertook this restructuring exercise and parted ways with quite a few people in July. That gave a reduction in operational costs by about 12 million a month and it will increase slightly over time,” she said.
In July, TSTT initiated its restructuring exercise by retrenching 468 employees – a mix of junior and senior staff as well as Estate Police officers. Out of that number, 403 were given payment in lieu of a regulatory 45 days’ notice, in keeping with the Collective Agreements with representative unions.
She noted that while the reductive measures have had positive effects, the company had to do more than just reduce costs, it had to pivot.
“We have had to significantly change our business models so you would see we are moving into things like fintech solutions, digital wallets, e-pay, cashbooks e health services and any adjacent services that would utilise the investment in infrastructure that we made since 2005,” she said.
While speaking on investment in infrastructure she said the Caribbean telecoms industry invests close to half a billion in US dollars yearly, to improve and maintain infrastructure to provide data for customers.
However, big tech companies such as TikTok, Meta, Netflix and others utilise 67 per cent of the region’s assets without paying a cent.
“Yet we are being asked to continuously invest as our customers make more demands for data utilisation,” she said.
She said a project called “Fair Share” is being developed to lobby big tech companies through the Caribbean Telecommunications Union and eventually through Caricom, to engage in bilateral negotiations to make a contribution to network development.
"TSTT CEO: Retrenchment of 468 saves $12m a month"