In 1979 British new wave group the Bug­gles sang the song “Video killed the Ra­dio Star” to high­light the in­creased pop­u­lar­i­ty of tele­vi­sion as a form of in­for­ma­tion and en­ter­tain­ment to the detri­ment of the ra­dio in­dus­try.

Well in that vein now it seems that dig­i­tal ap­pli­ca­tions and com­mu­ni­ca­tions plat­forms are af­fect­ing tra­di­tion­al telecom­mu­ni­ca­tion chan­nels.

It may be ex­pect­ed, that in the height of a pan­dem­ic that has re­strict­ed in-per­son in­ter­ac­tion, telecom­mu­ni­ca­tion com­pa­nies would be among the ma­jor bene­fac­tors as they should pro­vide the means to stay in touch with fam­i­ly and friends.

How­ev­er, that has not proven to be true, as the state-owned Telecom­mu­ni­ca­tions Ser­vices of T&T re­cent­ly an­nounced it would be hold­ing talks with its rep­re­sen­ta­tive unions about re­struc­tur­ing in the wake of an alarm­ing de­cline in the com­pa­ny’s rev­enue by $453 mil­lion (or 18 per cent) com­pared to the pre­vi­ous year.

The rea­son for the de­cline was dis­cussed in Par­lia­ment last week Wednes­day, with Prime Min­is­ter Dr Kei­th Row­ley ex­plain­ing the com­pa­ny had been se­vere­ly im­pact­ed by the fact that peo­ple were no longer mak­ing phone calls, at least in the tra­di­tion­al sense.

The Prime Min­is­ter said, “TSTT has been sig­nif­i­cant­ly im­pact­ed by the eco­nom­ic con­di­tions brought on by the pan­dem­ic. This, cou­pled with in­creased con­sumer adop­tion of dig­i­tal ap­pli­ca­tions like What­sApp and the util­i­sa­tion of com­mu­ni­ca­tion plat­forms like Zoom, has seen a steady ero­sion of tra­di­tion­al voice rev­enue.”

Row­ley said ac­cord­ing to a TSTT re­port, there had been a 50 per cent de­cline in fixed voice call­ing over ten years and a 20 per de­cline in mo­bile voice call­ing over the same pe­ri­od.

TSTT’s CEO Lisa Agard ex­plained the sit­u­a­tion had on­ly been ex­ac­er­bat­ed by the pan­dem­ic, as many peo­ple were home with ac­cess to fixed in­ter­net con­nec­tions and as such had less of a rea­son to use the phone to make calls in the tra­di­tion­al way.

“It’s not just fixed line it is al­so mo­bile,” Agard told the Busi­ness Guardian,” it’s been a kind of you know, sort of grad­ual thing that has been al­most ac­cel­er­at­ed as a con­se­quence of the lock­down where peo­ple are at home and so, there­fore, if they have Wi-Fi in their hous­es, be­cause they may have fixed in­ter­net con­nec­tion, they use their What­sApp call­ing over any­thing else. So you’re not go­ing to use your mo­bile phone. You’re go­ing to use your da­ta and you use your What­sApp be­cause you’re in a Wi-Fi area in your home. Right, so that is what that is clas­sic sub­sti­tu­tion.”

She ex­plained that the de­cline was al­so aid­ed by the im­prove­ments sev­er­al of these voice over in­ter­net call ap­pli­ca­tions have made in terms of qual­i­ty.

“You are prob­a­bly a con­sumer of the What­sApp call, you know that when it first start­ed, the qual­i­ty wasn’t very good. But the qual­i­ty has im­proved sig­nif­i­cant­ly over the past three years,”

And just like that, a huge chunk of tra­di­tion­al rev­enue, she ex­plained, was lost as a re­sult.

“So it’s two ar­eas so and as you can ap­pre­ci­ate, for Tel­co’s that is a tra­di­tion­al area of ac­tiv­i­ty and rev­enue,” she said.

How­ev­er telecom­mu­ni­ca­tion com­pa­nies are of­ten the main providers of In­ter­net ser­vices as well, and there has been a shift in the past few years from more call based phone plans to­ward in­ter­net and da­ta dri­ven phone plans. This has al­so been the case with TSTT. How­ev­er, she stressed the chal­lenges faced by TSTT are not unique to the com­pa­ny.

“That’s part of the re­sponse. Yes, net­works are more da­ta-cen­tric now, again, that is not unique or a T&T phe­nom­e­non that is a glob­al phe­nom­e­non. So you find that Tel­co’s par­tic­u­lar­ly mo­bile op­er­a­tors, look to see how they can, put more da­ta and make net­works more da­ta-cen­tric, since voice is now ba­si­cal­ly an app. What you must un­der­stand is that it’s not a com­plete sub­sti­tu­tion for the tra­di­tion­al rev­enue,” said Agard.

One of TSTT’s main com­peti­tors in the lo­cal mar­ket Dig­i­cel al­so has not had the rub of the green dur­ing the pan­dem­ic ei­ther. In 2020, the com­pa­ny did its own re­struc­tur­ing to ad­dress a US$7 mil­lion debt.

Dig­i­cel’s CEO Abra­ham Smith al­so ac­knowl­edged there had been a sig­nif­i­cant drop off in tra­di­tion­al calls in the past decade.

“Over the past 10 years, Dig­i­cel has seen a dra­mat­ic drop in the num­ber of peo­ple mak­ing voice calls and the num­ber of min­utes they spend on these calls. We have seen cus­tomer us­age and voice traf­fic shift to two places: OTT (Over The Top) apps like What­sApp and most re­cent­ly, in­ter­net-based ap­pli­ca­tions like Mi­crosoft Teams and Zoom for ex­am­ple, which have tak­en a large share of the busi­ness com­mu­ni­ca­tions mar­ket as well,” he said.

There have been at­tempts to mar­ket the tra­di­tion­al fixed-line phones, and at­trac­tive bun­dles to in­ter­net and TV cus­tomers as well, but while some cus­tomers took up on the of­fers, Agard said the de­mand was not re­mark­able.

“De­pend­ing on the pack­age that you take, you have un­lim­it­ed fixed to fixed calls and un­lim­it­ed fixed to any net­work calls right? Some in­ter­na­tion­al calls are bun­dled in there so from a val­ue per­spec­tive, it might make sense for some cus­tomers, you know, but it’s not huge. I don’t have peo­ple call­ing every day to say I want a fixed-line phone. I ab­solute­ly must have one, you know, it’s not like that,” she said.

How­ev­er, Agard was not will­ing to tell the Busi­ness Guardian about TSTT’s planned ad­just­ments just yet, as she was wary that dis­cus­sions with the Union and the up­com­ing re­struc­tur­ing were still pend­ing. Agard said the dis­cus­sion how­ev­er was crit­i­cal but hoped to have at least one meet­ing with the union be­fore re­veal­ing any pro­posed plans or ad­just­ments.

Dig­i­cel how­ev­er has start­ed mak­ing some moves to ad­just.

“This was one of sev­er­al rea­sons why Dig­i­cel made the de­lib­er­ate and strate­gic shift to be­come a Dig­i­tal Op­er­a­tor, which was of­fi­cial­ly launched in Oc­to­ber 2020. Step­ping out as a Dig­i­tal Op­er­a­tor meant that we no longer saw our­selves as sim­ply pro­vid­ing min­utes and da­ta, but now we are a dig­i­tal lifestyle part­ner for our cus­tomers, de­liv­er­ing 1440 min­utes of dig­i­tal en­gage­ment each day,” he said point­ing to the cre­ation of the BiP ap­pli­ca­tion, Sports­Max’s cov­er­age of the Olympics through its mo­bile app and es­tab­lish­ment of D’Mu­sic app.

Smith said, “the re­al­i­ty is that smart­phones aren’t just for mak­ing phone calls, that’s why our Prime Bun­dles and al­ways-on da­ta pack­ages are an im­por­tant part of our Dig­i­tal Op­er­a­tor fu­ture. Through these Bun­dles, cus­tomers get our apps as well as gen­er­ous da­ta al­lot­ments to use on each app, along with a boat­load of da­ta on top of that, for any use. Our cus­tomers are all in on dig­i­tal and we have gone all in as well.”

Smith ex­plained Dig­i­cel has had to in­vest more in its In­ter­net ser­vices as a re­sult of the shift­ing dy­nam­ic of the in­dus­try, which has been bur­den­some as most in­ter­net pack­ages are at a fixed cost re­gard­less of con­sump­tion.

“This in­cludes in­vest­ments in­to ca­pac­i­ty up­grades and planned up­grades to equip­ment. With the in­creas­ing use of OTTs, we have al­so had to spend more on up­grades to the mo­bile da­ta net­work to en­sure it meets de­mand. Fur­ther­more, there is dif­fi­cul­ty in ac­cess­ing for­eign ex­change as hard cur­ren­cy and this dri­ves up the cost of do­ing busi­ness be­cause the big cost items to keep the net­work up and run­ning at op­ti­mal lev­els, are billed in US dol­lars,” he said.

In­ter­na­tion­al providers have al­so made the price of do­ing busi­ness a bit steep­er for the com­pa­ny.

Smith said, “the ex­treme­ly high con­tent costs by in­ter­na­tion­al sup­pli­ers, for ex­am­ple, Dis­ney and Fox, for tele­vi­sion pro­gram­ming makes it very dif­fi­cult to man­age op­er­a­tions and costs. These in­ter­na­tion­al con­tent costs are al­so billed in US dol­lars. Then there is the is­sue of glob­al price in­fla­tion and in­put price in­fla­tion (eg labour costs, equip­ment, en­er­gy) which have in­creased the cost of do­ing busi­ness and af­fect­ed day to day op­er­a­tions. This, cou­pled with the glob­al sup­ply chain chal­lenges brought on by the pan­dem­ic have re­al­ly made it dif­fi­cult to man­age op­er­a­tional costs and prof­itabil­i­ty.”