Telecommunications Servicess of Trinidad and Tobago Company Limited ( TSTT ) was historically, the individual supplier 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 states agreed to liberalize their telecommunications sectors and to open their domestic markets to foreign companies.This understanding resulted in the entry of several rivals in the telecommunications market of Trinidad and Tobago thereby stoping the monopoly of TSTT, the province owned incumbent operator.Against this background, TSTT which provided chiefly fixed line, Mobile and cyberspace services, engaged Goulet Telecom International Inc.
to analyze the impact of globalisation on its operations.In its study dated December 7th 2007, Goulet Telecom International noted at pages 9 and 10 that:“To retain bing clients and win new clients, the officeholder operator must react to competitory moves and offer new and advanced services at competitory monetary values. Thus it has more services to develop and pull off, and there is downward force per unit area on its prices.”1The undermentioned SWOT Analysis hence seeks to analyze the extent to which TSTT has been able to successfully react to the challenges of the liberalised telecommunications sector.
1 Concluding study to TSTT on the impact of Liberalization on an Incumbent Telecommunication OperatorStrengths Weaknesses Opportunities Threats Analysis ( S.W.O.T.
analysis is a strategic planning technique which is used to measure the internal and external environment in which a company operates and competes. Internal environmental factors are classified into strengths and failings, while external environmental factors are classified into chances and menaces.An analysis of the strengths, failings, chances and menaces for TSTT in a competitory environment is highlighted, at Appendix A, a choice few of which are examined below.StrengthsA major strength of TSTT is its human resource capital and in peculiar, the leading and experience of its executive direction squad which has steered the Company through the procedure of liberalization in 2006, to its current place of sustained profitableness.
The Company ‘s executive direction squad is lead by Chief Executive Officer Mr. Roberto Peon, a seasoned telecommunications executive with over 30 old ages of extended international experience holding worked in BellSouth in the USA, NEXTEL Mexico and BCP Telecomunicacoes, Brazil amongst other Companies.The executive direction squad which is responsible for explicating TSTT ‘s strategic program is similarly comprised of a mix of experient and qualified local and foreign telecommunications professionals.The strength of the Company is reflected in the leading accomplishments and managerial acumen of the executive squad who ensured that the Company retained important market portion since the liberalisation of the sector.
During the fiscal twelvemonth 2006/07, the Company ‘s strategic enterprises which were formulated with a position to viing in the deregulated market were successfully implemented as TSTT ‘s nomadic client base was about doubled to over one million customers.2Strong leading such as that which was demonstrated by the executive direction squad during the Company ‘s passage from a monopolistic to a competitory environment has been identified as a critical factor for success in the Malcolm Baldrige Model for measuring a Company ‘s SWOT.The strength of the Company ‘s human resource capital is besides reflected in the Company ‘s in-between direction and Senior and Junior Staff employees who have successfully implemented the Company ‘s strategic enterprises such as the deployment on new client services such as Internet Protocol Television ( IPTV ) .As such, one may reason that one of TSTT ‘s greatest assets is its human resource capital as without it, the Company ‘s best concern programs and thoughts would non win.
FailingsA Company’sweaknesses may be reflected in its deficiency of managerial accomplishments, technological retardation, unequal systems or procedures, or hapless client service.One of the major failings which have been identified at TSTT is its hapless web substructure and aged works which has on occasion resulted in the bringing of hapless client service to its endorsers.TSTT ‘s aged exterior works has besides had an impact on the Company ‘s ability to supply new services such as IPTV to some of its clients due to the inaccessibility of upgraded works installations in certain countries of the state.As a consequence of the elderly works installations, the Company has non “rolled out”its IPTV service throughout the state, thereby preventing it from efficaciously viing with FLOW, the dominant Cable Television supplier which services the full state.
This failing of TSTT was highlighted in the Goulet Report which underscored the demand for the Company to upgrade its elderly works in order to successfully vie in a liberalised industry.The said study stated that:“On the engineering forepart, bing webs and systems of the officeholder operator are non good suited to present new services expected by clients. A traditional switched web can non easy back up radio and wireline entree, voice, informations, nomadic services and new types of converged services demanded by clients. To efficaciously vie, an officeholder operator is faced with replacing a web of progressively disused equipment……”Despite this failing, it should be noted that TSTT has since invested $ 700 million on engineering within the period 2007 to 2009 in order to upgrade its works so that it can efficaciously supply new services such as IPTV.
3Trinidad and Tobago Guardian Newspaper, November 4th 2009Another failing of TSTT is the restraint on direction ‘s ability to efficaciously run in the liberalised telecommunications industry as a consequence of inflexible contract commissariats in the Corporate Agreements between the Company and its Recognised Majority Union, the Communication Workers Union.One such proviso in the Collective Agreement is Article 12 -Contract Work, which at present shackles direction ‘s ability to efficaciously contract out maps presently performed by the Company which no longer stand for its nucleus concern in a competitory environment. See affiliated Article 12This restraint on direction is identified as a failing as it was agreed to with the Union in a monopolistic telecommunications environment where the Company ‘s demand to efficaciously vie was non a relevant consideration.However in the current liberalised environment, the restraints imposed on the Company ‘s ability to contract out facets of its operations has for illustration, prevented the Company from undertaking out its Directory Publications Department which it no longer considers to be a nucleus facet of its concern.
The Company ‘s determination to contract out this facet of its concern and retrench 11 employees in the Directory Publications section has been temporarily halted as a consequence of an Order for an Injunction that was granted to the Union by the Industrial Court of Trinidad and Tobago.4In the event that the substantial affair of the Company ‘s determination to retrench the 11 employees is determined in the Union ‘s favor, such a determination by the Court would hold a profound consequence on the Company as it would sabotage direction ‘s right to contract out work in the hereafter.ESD Application No. 12 of 2007 dated August 20th 2007 in the Industrial Court between CWU and TSTTOpportunitiesOpportunities exist when an external environmental analysis reveals new chances for net income and growing as a consequence of an unrealized client demand, the reaching of new engineerings, or the relaxation of ordinances in the sector.
One such chance which TSTT has sought to capitalise on is with its raid into the amusement sector through the proviso of IPTV, a new service which it now provides in selected countries in Trinidad.The IPTV merchandise which is branded “Blink Entertainment”is a digital telecasting service which, alternatively of presenting content through traditional broadcast and overseas telegram formats, is received by the spectator utilizing internet protocol engineering.TSTT, like many of the universe ‘s major telecommunications suppliers is researching IPTV as a new gross chance from its bing and possible endorser base and as a defensive step against invasion from rivals such as FLOW, a conventional overseas telegram telecasting supplier which now provides cyberspace and voice services.Although TSTT ‘s jutting gross watercourses for the fiscal twelvemonth April 2010 to March 2011 are non yet available, it should be noted that planetary IPTV market grosss are forecasted to turn from US $ 12 billion in 2009 to US $ 38 billion in 2013.
5In visible radiation of the aforesaid one may reasonably conclude that TSTT is good poised to capitalise on the planetary growing tendency in the IPTV market thereby carry throughing its aim of deducing a new gross watercourse from this market.Another new market which TSTT has sought to perforate is the security services sector with the launch of its Blink Vigilance Security Service.This merchandise 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 endorsers.The chance to prosecute this strategic enterprise is as a consequence of the turning condemnable 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.
6Since TSTT provides the substructure used by security companies to run their concern, its entryway into the security services sector provides an first-class chance for the Company to increase its gross watercourses and keep its viability in a competitory telecommunications market.The proviso of these two new services, Blink TV and Blink Vigilance are hence two illustrations of how TSTT has created new chances for itself based on consumer demands and alterations in the societal environment.One of the most important menaces faced by TSTT was that provided by its rivals in the nomadic services market as a consequence of the deregulating of the telecommunications sector in 2006.As a effect of the liberalisation of the market, Digicel, one of the fastest turning telecommunications Companies in the Caribbean, began offering Mobile service which for the first clip gave the population of Trinidad and Tobago a pick of radio suppliers.
The debut of Digicel into the Sector was expected to take significant market portion from TSTT which had antecedently enjoyed monopoly position.The extent of the menace posed to TSTT by its chief rival is reflected in the Company ‘s fiscal consequences in the immediate wake of Digicel ‘s entry into the market. In the fiscal twelvemonth 2006 to 2007, TSTT suffered a fiscal loss of TT $ 122 M as compared to the fiscal twelvemonth 2005 to 2006 where it made a net income of $ 261 million.7Similarly, FLOW, a Company that had traditionally provided merely Cable Television service, became in May of 2008, the first “Triple Play”provider of telecommunications services in Trinidad with its offering of Cable Television, Broadband and Landline Voice Services to the population at big.
As a consequence of FLOW ‘s strategic enterprises, TSTT is now faced with an extra menace to its gross watercourses in the Broadband and Landline Voice sectors.Notwithstanding the menace posed by its rivals, it appears that TSTT has successfully managed to endure the proverbial storm as evidenced by its fiscal consequences for the fiscal old ages 2007/08 and 2008/09 whereby it generated after revenue enhancement net incomes of $ 159.9 million and $ 384.3 million respectively.
8Having assessed the SWOT elements that TSTT is faced with in its internal and external environment since the coming of competition, one may reason that the administration has been able to keep its place as the dominant entity in the telecommunications sector in Trinidad and Tobago.This has been facilitated by the leading of the executive direction squad which has taken strategic enterprises such as the investing of over $ 700 million in new engineering in order to turn to the failing associated with the Company ‘s elderly works. This investing has besides given TSTT a competitory advantage in the IPTV and Security services market as the Company has exploited the chances in its external environment to make new gross watercourse for itself.The fiscal consequences of TSTT since the liberalization of the market hence supports the proposition that the administration has been able to pull off the menaces posed by its rivals as evidenced by its after revenue enhancement net incomes since 2006.