Telecommunications Services of Trinidad and Tobago Company

I have been employed with the Telecommunications Services of Trinidad and Tobago

Company Limited (TSTT) for the past fourteen years. TSTT was historically, the single provider of telecommunications services in Trinidad and Tobago until the mid 1990’s when, pursuant to a World Trade Organisation Agreement in 1997 on Basic Telecommunications, 69 countries agreed to liberalise their telecommunications sectors and to open their domestic markets to foreign companies.

This agreement resulted in the entry of several competitors in Trinidad and Tobago’s telecommunications market thereby ending TSTT’s monopoly status.

Against this backdrop, TSTT which provided primarily fixed line, mobile and internet services, engaged Goulet Telecom International Inc. to examine the impact of globalization on its operations.

Strengths Weaknesses Opportunities Threats Analysis (SWOT)

Gregory G. Dess, G.T. Lumpkin, Alan B. Eisner (2007) Strategic Management Text and Cases, 3rd ed. , New York, McGraw-Hill Irwin states “One of the most basic techniques for analysing firm and industry conditions is SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and threats. SWOT analysis provides a framework for analyzing these four elements of a company’s internal and external environment. It provides “raw material”-a basic listing of conditions both inside and surrounding your company. The strengths and weaknesses portion of SWOT refers to the internal conditions of a firm-where your firm excels (strengths) and where it may be lacking relative to competitors (weaknesses). Opportunities and threats are environmental condition external to the firm. Opportunities and threats are also present in the competitive environment among firms competing for the same customers.”(p 49)

An analysis of the strengths, weaknesses, opportunities and threats for TSTT in a competitive environment is highlighted, at Appendix A.

Strengths

One of the major strength of TSTT is its human resource capital and in particular, the leadership and experience of its executive management team which has steered the Company through the process of liberalisation in 2006, to its current position of sustained profitability.

The strength of the Company is reflected in the leadership skills and managerial acumen of the executive team who ensured that the Company retained significant market share since the liberalisation of the sector. Management of TSTT have become more strategic in their thinking and in their of way developing new and innovative technology. TSTT are also developing the intellectual capacity of the workforce through e-learning, training and development program and courses.

The strength of the Company’s human resource capital is also reflected in the Company’s middle management and Senior and Junior Staff employees who have successfully implemented the Company’s strategic initiatives such as the deployment on new customer services such as Internet Protocol Television (IPTV) and BLINK Broadband.

Weaknesses

One of the major weaknesses which have been identified at TSTT is its poor network infrastructure and aged plant which has occasionally resulted in the delivery of poor customer service to its subscribers in many instances customers are made to wait for as long as a year to have their phones repaired especially if it is cable related issue.

TSTT’s aged outside plant has also had an impact on the Company’s ability to provide new services such as IPTV to some of its customers due to the unavailability of upgraded plant facilities in certain areas of the country.

As a result of the aged plant facilities, the Company has not “rolled out”its IPTV service throughout the country, thereby precluding it from effectively competing with FLOW, the dominant Cable TV provider which services the entire country.

Another weakness is that TSTT was only able to focus on customer service when it was faced with competition, only then did the prices of the company’s goods and services were reduced.

Opportunities

TSTT has sought to capitalize on by its foray into the entertainment sector through the provision of IPTV, a new service which it now provides in selected areas in Trinidad.

The IPTV product which is branded “Blink Entertainment”is a digital television service which, instead of delivering content through traditional broadcast and cable formats, is received by the viewer using internet protocol technology.

TSTT, like many of the world’s major telecommunications providers is exploring IPTV as a new revenue opportunity from its existing and potential subscriber base and as a defensive measure against encroachment from competitors such as FLOW, a conventional cable television provider which now provides internet and voice services.

Another new market which TSTT has sought to penetrate is the security services sector with the launch of its Blink Vigilance Security Service.

This product which was launched on November 3rd 2009 (along with Blink Entertainment) is a wireless security surveillance system which TSTT offers to both commercial and residential subscribers.

Trinidad and Tobago Guardian Newspapers, November 4th 2009 stated “The opportunity to pursue this strategic initiative is as a result of the growing criminal activity in Trinidad and Tobago which has driven a demand for security services a point which was made by Dennis Gordon, Vice President, Organisational Risk and Security Services at the launch of the product.”

TSTT provides the infrastructure used by security companies to operate their business, its entrance into the security services sector provides an excellent opportunity for the Company to increase its revenue streams and maintain its viability in a competitive telecommunications market.

The provision of these two new services, Blink TV and Blink Vigilance are therefore two examples of how TSTT has created new opportunities for itself based on consumer needs and changes in the social environment.

Threats

One of the most significant threats faced by TSTT was that provided by its competitors in the mobile services market as a result of the deregulation of the telecommunications sector in 2006.

As a consequence of the liberalisation of the market, Digicel, began offering mobile service which for the first time gave the population of Trinidad and Tobago a choice of wireless providers.

The introduction of Digicel into the Sector was expected to remove substantial market share from TSTT which had previously enjoyed monopoly status.

TSTT Financial Reports stated “The extent of the threat posed to TSTT by its main competitor is reflected in the Company’s financial results in the immediate aftermath of Digicel’s entry into the market. In the financial year 2006 to 2007, TSTT suffered a financial loss of TT $122 M as compared to the financial year 2005 to 2006 where it made a profit of $261 million.”

Likewise, FLOW, a Company that had traditionally provided only Cable TV service, became in May of 2008, the first “Triple Play”provider of telecommunications services in Trinidad with its offering of Cable TV, Broadband and Landline Voice Services to the population at large.

As a result of FLOW’s strategic initiatives, TSTT is now faced with an additional threat to its revenue streams in the Broadband and Landline Voice sectors.

PEST ANALYSIS

TSTT’s PEST analysis focuses on the following factors, Political, Economic, Social and Technological scan of the macro-environment in which the organisation operates. The political environment as it presently relates to TSTT is one of uncertainty. This has been mainly as a result of the change in government of Trinidad and Tobago on 24 May 2010 the board of directors resigned since they were politically appointed and to date no board has been appointed. This has result in the capital expenditure budget for the various departments not being past. To this extent certain activities have been at a stand-still such as the cut-over of new infrastructure in Penal, Fyzabad areas which would allow the company to provide a more efficient and reliable telephone service to the people living in these areas.

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TSTT has also been impacted by economic factors from the environment with the liberalisation of the telecommunications market TSTT has not given an increase in salary to its junior and senior staff workforce. Due to the liberalisation of the market as stated before this has resulted in TSTT loosing part its customer base to its competitor resulting in a decrease in the company’s profit margins in 2005-2006 of TT$122m.

TSTT has been a socially responsible organisation, sponsoring local sporting activities and teams, TSTT has been and still is the main sponsor for the

“Soca Warriors” Trinidad and Tobago’s national football team.

Through its Employee Wellness Program various initiatives have been made available to employees such as “Domestic and Substance Abuse Programs”. Recently, due to the outbreak in the H1N1 virus TSTT has taken the initiative to bring-in at the various work locations, personnel from the Ministry of Health to immunize staff against the virus and other illnesses.

Among the social and cultural events covered by TSTT’s Employee Relations department are Thanksgiving prayer meetings at the end of the last year and start of the new-year, Employees calypso competition, secretary’s day, Sports and Family day, Emancipation and Indian arrival day activities etc. These are undertaken to allow the various levels staff in this multi-cultural, racial country to interact as one and enjoy the social, cultural and sporting activities. It fosters a culture of trust, harmony and cooperation between the hierarchical levels in the organisation. These activities also encourage or motivate both customers and employees to buy-in to the policies of the company and encourage loyalty.

Through the use of innovation, research and development TSTT has been able to develop new technologies which would allow it to maintain its competitive advantage in the face of competition. This can particularly be seen through the company’s use of technology to penetrate new markets such as the provisioning of Internet Protocol Television and residential and business security and alarm systems.

Industry Attractiveness

In determining Industry Attractiveness, the issue of Competition must be taken into consideration, as this will have an impact on the threat of new entrants and competitive rivalry within the market from FLOW and Digicel. TSTT no longer enjoys being a monopoly but now has to share its market with other competitors.

Buyers would also have more bargaining power since they have a wider variety from which to choose as a consequence of the liberalisation of the telecommunications market as a result consumers are more likely to purchase where they can get value for their money. TSTT also has to compete against substitute goods and services, for example customers may not purchase their mobile phones from TSTT but from its’ competitor. The customer may simple pay TSTT for the use of the service of being attached to its network, therefore the company loses on it sale of mobile phone.

Suppliers of TSTT would also have bargaining power as to what price they charge you for their goods since they can sell the same goods to your competitors and it you want to maintain competitive advantage over your competitors you would want to enjoy first market advantage and market leadership by providing new and innovation technology to your customers before your competitors. (See Appendix B)

STAKEHOLDER ANALYSIS

Stakeholder Analysis is necessary because it provides information indicating the level of influence and expectations of the various stakeholders within the environment.

As it relates to the Company’s (TSTT) relationship with its employees and the representative Union a great deal of mistrust exists between this group and Management. In addition during times of industrial unrest it is alleged that the Union is able to influence workers to either “work-to-rule” or “down tools”.

With regards to the customers, if customers are not satisfied with the quality or price, the opening-up of the Telecommunications Sector could cause customers and have caused customers to migrate to other service providers. Customers feel that they can getting better service for their money have chosen to migrate to Digicel or FLOW where they believe they are getting better value for their money.

The management group needs to understand, in addition to managing, emphasis needs to be placed on effective Leadership and to an extent leadership by example. Over the past seven years junior and senior staff employees have not received a salary increase while management level continue to be paid incentives on a yearly basis for meeting their set objectives. This has left employees feeling disenchanted and de-motivated with management. (See Appendix C)

Assessment of TSTT’s position

Having assessed the SWOT elements that TSTT is faced with in its internal and external environment since the advent of competition, one may conclude that the organisation has been able to maintain its position as the dominant entity Trinidad and Tobago telecommunications sector.

This has been facilitated by the leadership of the executive management team which has taken strategic initiatives such as the investment of over $700 million in new technology in order to address the weakness associated with the Company’s aged plant. This investment has also given TSTT a competitive advantage in the IPTV and Security services market as the Company has exploited the opportunities in its external environment to create new revenue streams for itself.

“Porter’s five forces” can be seen through the threat of potential entrants in this case FLOW and Digicel, since TSTT no longer exist in a monopolistic market customers have bargaining power and this was seen when TSTT had to reduce its prices to be more competitive. Suppliers’ in this case also bargaining power with more than one telecommunications company to sell mobile telephones so they are able to bargain as to which telecommunications company what to sell them and at what price. Competitive rivalry is evident when TSTT promotes it mobile phones at reduced prices and the competitor Digicel also reduces its prices in order to compete with TSTT.

The financial results of TSTT since the liberalisation of the market therefore supports the proposition that the organisation has been able to manage the threats posed by its competitors as evidenced by its after tax profits since 2006.

In this type of arrangement, emphasis is being placed on maintaining Strengths, exploring and analyzing Opportunities, improving or outsourcing Weaknesses and identifying, developing and implementing Plans to overcome Threats this is the strategic direction of the company.

Conclusion

Through strategic planning and implementation TSTT was successfully able to maintain its leadership position in the telecommunications market in Trinidad and Tobago in a liberalised, global market. The organisation was able to convert its weaknesses into strengths and threats in to opportunity to maintains competitive advantage. Though its leadership and strategic management, innovative strategies and technologies were developed allowing for training and development of staff thereby providing opportunities for staff to be promoted within the organisation.