TSTT gets back in the black

Trinidad - CEO insists further improvements necessary to sustain turnaround

TSTT CEO Roberto Peon is pleased with the company’s performance for the financial year 1 April 2007 to 31 March 2008, but cautioned that the results may not be sustainable unless the company improves its performance in certain key areas – customer satisfaction, revenue growth, and operational expenses, including employee costs. According to audited results prepared by Ernst and Young, and approved by TSTT’s Board of Directors late Wednesday, the company realized an after-tax profit of TT$159.9 million, made possible by several strategic initiatives carried out by the company including an 8% reduction in operating costs. “This is an extraordinary rebounding from the company’s TT$239 million loss suffered for the period 1 April 2006 to 31 March 2007,” said Peon. He noted that revenue was up six percent (6%), driven mainly by mobile and broadband services and interconnection rates.

The TSTT CEO explained that the company introduced a partial re-organisation along lines of business to focus on customers’ needs. “This coupled with the implementation of aggressive controls and more efficient processes helped address the key expense areas that contributed to the previous year’s loss.” Peon said that fraud and bad debt which negatively impacted TSTT last year were brought down to industry-tolerant levels. “Also, the impacts of cable theft and vandalism were mitigated using improved cable installation techniques, greater surveillance and in several instances substituting the copper cables with fiber optics.”

Peon also noted that the company significantly reduced marketing costs and experienced much lower asset impairment costs due to its continued investment in modernizing facilities and equipment. “Our senior management’s focus on operational efficiency and cost control led to an overall reduction of $231.9 Million in operating expenses for the year. We have turned the corner, but still have more to do. We must improve customer satisfaction, increase top-line revenue growth, and continue to drive cost out of the business or this recovery will be short-lived.”

Peon stated that significant steps were taken during the 2007-08 financial year to improve service quality. “We are a customer driven business first. TSTT invested over TT$$500 million in capital projects to increase operating efficiency and enhance our network and transmission facilities.”

These improvements included: • increasing mobile coverage to 99% and reducing incomplete and dropped calls rates to less that 1% (in line with international standards), • evolving TSTT’s core network to an Internet Protocol (IP-based) network to support the delivery of data that the country’s business and consumer sectors need, • modernizing substantial parts of TSTT’s outside plant to support the repair of over 55,000 service lines and increase the availability of Blink broadband access, • developing a state-of-the-art, fully customizable Metro-ethernet network solution to give our businesses a competitive edge, • developing an equally advanced Network Operations Centre that has given TSTT the means to reduce its response time to major network issues, • and, building the foundation to deploy an IP-based TV entertainment offering.

“Our goal is to sustain and build on this success, but that goal will be challenging. We know our competitors will not stand still, while TSTT, unfortunately, still faces constraints on how quickly and effectively we can respond to competition and market changes.” Peon reiterated that if TSTT was to remain ahead or even afloat “a transformation in the technology the company must roll out, in the skill sets of employees to support that technology, and in the implementation of international best practice procedures, must happen.”