Cable&Wireless Communications, the minority shareholder in telecommunications provider TSTT, last week reported that its share of the after-tax profits of the local company had declined by more than half from US$19 million (TT$121.6 million) in 2010 to US$7 million (TT$44.8 million) in 2011. Cable&Wireless Communications, which owns 49 per cent of TSTT, is the London-based group that owns telecommunications companies throughout the region. Cable&Wireless Communication's share of the revenue also experienced a marginal decline. For the year ended March 2010, the group's share of TSTT's revenue amounted to US$238 million (TT$1.52 billion) while its share of the local company's revenue declined to US$232 million (TT$1.48 billion) by the end of March 2011. In its annual report for the year ended March 31, 2011, issued on May 25, Cable&Wireless Communications also announced that it will roll out the iPhone4, the highly successful Apple phone, in its Caribbean markets, including its joint venture in Trinidad and Tobago.
A TSTT source said the company would launch the iPhone4 in the next few weeks and described the launch as "a very exciting opportunity to bring one of the most innovative products in the world to Trinidad and Tobago." The official said that TSTT has been prevented by Apple from providing much pre-launch publicity on the product. Asked whether TSTT would have exclusive rights to sell and service the smart phone in the local market, the telecommunications official said: "It is not exclusive, but when we launch we will be the only authorised Apple distributor of phones." Verizon, the US mobile provider, released the iPhone4 in February. On March 2, 2011, at the iPad 2 event, Apple announced that they have sold 100 million iPhones worldwide and that by leveraging solid volumes and the iPhone's high selling price, Apple became the largest mobile handset vendor in the world, surpassing long-time leader Nokia.
Cable&Wireless Communications may be hoping that the launch of the iPhone4 provides a boost to TSTT's sagging results.
Of TSTT's three main lines of business, it experienced declines in the number of its mobile and fixed-line subscribers but double-digit growth in the number of its broadband subscribers. The company had 288,000 fixed-line subscribers in 2010 but this declined to 277,000 subscribers in 2011. TSTT, however, saw a 13 per cent growth in the number of its broadband subscribers with those jumping from 82,000 in March 2010 to 93,000 in March 2011. At the end of March 2010, TSTT had 883,000 mobile subscribers but this had declined to 877,000 by the end of March this year. The company's disclosure that it had 877,000 subscribers at the end of March raises questions about whether TSTT can still boast of being the nation's number one mobile provider. The quarterly market report published by the Telecommunications Authority of T&T states that T&T had 1,839,695 mobile voice subscribers as at March 2010. This suggests that TSTT had 48 per cent of the local market and its bitter rival, Irish-owned Digicel, had 52 per cent of the local mobile market 14 months ago. At the end of 2010, the total number of mobile subscribers in T&T inched ahead by 2.6 per cent to close the year at 1,894,240 subscribers.
While TSTT has concentrated its marketing might on attempting to blunt the Digicel onslaught, it also faces a threat from Flow Trinidad's introduction of its triple-play package offering television, Internet and telephone services to T&T.
Explaining the TSTT results, Cable&Wireless Communication wrote in its annual report: "TSTT faced difficult economic conditions resulting in fixed line and mobile usage declines, whilst settlement of union litigation and increased handset subsidies to maintain market leadership further impacted results. "We also saw increased levels of depreciation following capital investment in the network during the year."
Asked to comment on the TSTT results, the company's chief financial officer Rakesh Goswami noted that 51 per cent of TSTT is owned by National Enterprises Ltd (NEL), which is a company that is listed on the local stock market. Goswani said: "We cannot and should not comment on any TSTT results until they are declared by NEL. "We are not allowed to talk about TSTT's numbers that have not been declared by our parent company." NEL, which comprises shareholding of the State in TSTT as well as Tringen, Phoenix Park Gas Processors, Atlantic LNG and the National Flour Mills, is expected to release its March 2011 results this month.