An­tho­ny Wil­son

The two top of­fi­cials at TSTT– the 51-per cent State-owned telecom­mu­ni­ca­tions provider–are call­ing on the reg­u­la­tors to in­sist that the 49 per cent mi­nor­i­ty share­hold­er, Ca­ble & Wire­less Com­mu­ni­ca­tions, sell its 49 per cent stake in the lo­cal com­pa­ny.

TSTT chair­man Emile Elias and the com­pa­ny's chief ex­ec­u­tive Ronald Wal­cott made the point dur­ing a joint in­ter­view on Thurs­day last, at TSTT head of­fice, down­town Port-of-Spain.

Elias said the long-await­ed val­u­a­tions of Ca­ble & Wire­less' 49 per cent stake in TSTT had been sub­mit­ted and, as the val­u­a­tion were a pre­req­ui­site for the sale of the stake, he wants the process to be com­plet­ed by year end.

He said: "We at TSTT want a strate­gic part­ner with whom we can go in­to the fu­ture and that part­ner, if it is the right com­pa­ny, will bring that added val­ue to us."

Elias said the Gov­ern­ment "needs to find a for­mu­la that would re­move TSTT from the neg­a­tive as­pects of the five-year po­lit­i­cal cy­cle."

TSTT is cur­rent­ly ne­go­ti­at­ing with lo­cal fi­nan­cial in­sti­tu­tions to arrange $1.9 bil­lion in fi­nanc­ing for the com­pa­ny's five-year strate­gic plan, which en­vis­ages a to­tal of $3.8 bil­lion in cap­i­tal ex­pen­di­ture. The telecom­mu­ni­ca­tions provider ex­pects to gen­er­ate $1.9 bil­lion in­ter­nal­ly to con­tribute to the cap­i­tal ex­pen­di­ture.

The $1.9 bil­lion in long-term fi­nanc­ing will take out $1.1 bil­lion in short-term debt that TSTT took on in or­der to par­tial­ly fund its strate­gic plan and re­plen­ish its cash re­serves, which were de­plet­ed by the pay­ment of $800 mil­lion in back­pay for two, three-year col­lec­tive agree­ment terms. The fact that the com­pa­ny is look­ing to raise $1.9 bil­lion in long-term debt does not pre­clude the pos­si­bil­i­ty of ven­dor fi­nanc­ing, the of­fi­cials said, but that would be a func­tion of the con­di­tion­al­i­ties, the rate of in­ter­est and oth­er terms and con­di­tions of such fi­nanc­ing.

The com­pa­ny is look­ing to raise an amor­tis­ing TT-dol­lar bond of at least ten years with the in­ter­est rate bear­ing some re­la­tion­ship to the 4.5 per cent that the Gov­ern­ment was able to bor­row at on the lo­cal and in­ter­na­tion­al cap­i­tal mar­kets.

Elias said: "We think TSTT's bal­ance sheet and its im­pec­ca­ble track record in meet­ing all of its fi­nan­cial oblig­a­tions would sug­gest that the pre­mi­um over gov­ern­ment debt should be min­i­mal."

Wal­cott point­ed out that TSTT has nev­er re­ceived an eq­ui­ty in­jec­tion from its two share­hold­ers in its 26 years of ex­is­tence. It has not ever need­ed a gov­ern­ment guar­an­tee for its debt and it has paid out $2.7 bil­lion in div­i­dends since in­cep­tion.

It is en­vis­aged that the bond will be is­sued be­fore the end of 2016.

Elias said: "A crit­i­cal part of our five-year plan is to get the spec­trum to be able to break out high-speed mo­bile da­ta, the 4G li­cence. We have de­cid­ed to take a vig­or­ous ap­proach with TATT (the Telecom­mu­ni­ca­tions Au­thor­i­ty of T&T) to en­sure that TSTT gets the spec­trum we re­quire in the short­est pos­si­ble time."

TSTT will take all mea­sures nec­es­sary to en­sure the com­pa­ny re­ceives the re­quest­ed spec­trum for high-speed mo­bile da­ta, said Elias.

They al­so said that while TATT can grant spec­trum, it does not have the pow­er to grant a third mo­bile con­ces­sion, as that is un­der the purview of the Cab­i­net.

Re­fer­ring to the re­quest for pro­pos­als (RFP) for the 4G li­cence that TATT is­sued three years ago, Elias said TSTT pro­duced a de­tailed bid that met all of the re­quire­ments of the RFP.

"Sit­ting in the room as a part­ner dur­ing the prepa­ra­tion of the bid was Ca­ble & Wire­less, which was part of the ap­pli­ca­tion by TSTT," said Elias, adding:

"Ca­ble & Wire­less, on its own, pre­pared and sub­mit­ted an ap­pli­ca­tion for a third mo­bile li­cence" and then in No­vem­ber 2014 an­nounced that it was ac­quir­ing Flow, which had it­self sub­mit­ted an ap­pli­ca­tion. He re­it­er­at­ed his call for the RFP to be scrapped be­cause of the ma­te­r­i­al changes that took place in the two oth­er ap­pli­cants for a 4G li­cence.

They ar­gued that while it is tech­ni­cal­ly pos­si­ble for TATT to is­sue three 4G li­cences, that would en­tail an en­tire re­design of the spec­trum plan. The TSTT of­fi­cials al­so ar­gued that to in­tro­duce a third mo­bile op­er­a­tor in T&T–with the two ex­ist­ing op­er­a­tors: TSTT and Dig­i­cel–would lead to a de­cline in ser­vice lev­els, a re­duc­tion in the in­tro­duc­tion of new tech­nol­o­gy and would be a drain on the coun­try's for­eign ex­change re­sources.

Elias said: "We al­ready have one-and-a-half cell­phones for every man, woman, child and new­born ba­by in this coun­try. There is no log­ic to spend­ing valu­able for­eign ex­change that a third mo­bile provider would de­mand. We our­selves need US dol­lar as we build out the fu­ture. Why are we du­pli­cat­ing that again and again."

Wal­cott added: "It be­comes a waste of re­sources."

The TSTT chair­man dis­closed that the com­pa­ny has en­gaged Er­ick­son, the glob­al telecom­mu­ni­ca­tions provider, to in­tro­duce a con­ver­gence pro­gramme to the com­pa­ny that will al­low cus­tomers to amend, ex­pand or change their pack­ages "at the touch of a fin­ger­tip."

The con­ver­gence project will trans­form TSTT in­to an ag­ile, broad­band com­mu­ni­ca­tions com­pa­ny, said Elias, with Wal­cott point­ing out that the en­ter­prise pro­gramme will al­low TSTT to have a 360 de­gree view of all of its cus­tomers and be in a po­si­tion to pro­vide them with any ser­vice cus­tomers re­quire with­in 48 hours.

The cost of the con­ver­gence project will be $300 mil­lion and phase one will be rolled out in Sep­tem­ber, phase two by Jan­u­ary next year and phase three by Ju­ly 2017.

Elias said: "At this point, we have siloed op­er­a­tions: one for res­i­den­tial, one for mo­bile, one for en­ter­prise and a dif­fer­ent one for ser­vice de­liv­ery. We are col­laps­ing all of the si­los, which would mean there would on­ly be TSTT cus­tomers and we would be able to build a so­lu­tion that best suits the in­di­vid­ual's need or ac­com­mo­date the in­di­vid­ual's de­sires."

The com­pa­ny's rev­enues in the last five years have been es­sen­tial­ly flat at about $3 bil­lion a year, "in the face of the most in­tense com­pe­ti­tion in the lo­cal telecom­mu­ni­ca­tions mar­ket," added Elias.

He said TSTT has been able to main­tain in ex­cess of 50 per cent of the mo­bile mar­ket and the com­pa­ny has been "ag­gres­sive­ly tak­ing steps to in­crease mar­ket share in the mo­bile side," where the com­pa­ny sees the fu­ture.

Fol­low­ing a glob­al trend, the TSTT of­fi­cials said in T&T more and more peo­ple are us­ing their mo­bile tele­phones to sub­sti­tute for land­line (home) de­vices.

While TSTT main­tains a 93 per cent mar­ket share of the lo­cal land­line busi­ness, ac­cord­ing to Elias: "There is some drift down­wards by peo­ple who would nor­mal­ly use their land­lines. They keep the land­line, but they don't use it for the num­ber of min­utes they used to in the past."

In terms of tele­vi­sion, Wal­cott ac­knowl­edged that Flow dom­i­nates the lo­cal mar­ket, with TSTT look­ing to in­crease its ten per cent po­si­tion and grow­ing.

"Our mar­ket share will con­tin­ue to grow ex­po­nen­tial­ly as we roll out our fi­bre so­lu­tion," said Wal­cott.

Elias added that TSTT has a three-phase fi­bre so­lu­tion that the com­pa­ny ex­pects will con­nect 80,000 homes in the first in­stance and 200,000 homes with­in five years as part of the com­pa­ny's re­vised, five-year strate­gic plan.

As the com­pa­ny places fi­bre in new ar­eas, the plan is to mar­ket the com­pa­ny's broad­band tele­vi­sion and In­ter­net of­fer­ings to res­i­dents in bun­dles. The com­pa­ny plans to con­vert all of its cop­per cus­tomers to fi­bre.

In re­la­tion to the re­cent de­ci­sion by Flow to in­crease the price of their res­i­den­tial tele­vi­sion pack­ages by a max­i­mum of 6.3 per cent, Elias claimed that TSTT cur­rent­ly has the most com­pet­i­tive tele­vi­sion rates in the coun­try.