As he gets ready to leave TSTT, Roberto Peon, the chief executive officer, is clearly proud of the changes he has been able to influence at the majority state-owned telecommunications provider in the five years he has served as its chief executive. Peon, 62, who announced last month that he was resigning from TSTT, said he was leaving the company because he wanted to be closer to his children and his grand-children—not because of any fundamental differences with the board. While he says he cannot discuss the board’s business, he admits that there are always differences of opinions among directors, but added that both boards under which he worked supported him on the large issues such as investments and the relationship with the union.
The TSTT he joined in February 2007 was a company beset by issues: There were problems with its landline network, which had the tendency to go “up and down” and which was the subject of a great deal of customer complaints. This is no longer a problem. He recalled that shortly after he joined the organisation a $100-million pre-paid mobile fraud was discovered, which caused a “big hit” to the company’s balance sheet. This has not recurred. Peon said he found a company in which the financial controls “were not there,” which was mainly due to the “many good people” who left the company as a result of the voluntary separation programme in 2006. This matter has been resolved and TSTT is much more focused on producing timely and relevant financial reports. Part of the company’s problem five years ago was a lack of clinical focus. “When you make the strategy, the thing that comes after would be the initiatives. When I first got here, there were about 130 initiatives going on at the same time. You can’t manage a company that way. Even a big company like Bell South, where I used to work along with 86,000 employees, never had more than 25 initiatives.” His management philosophy is based around the concept of keeping it simple so that people can relate to what he was advocating.
Peon said the company was being managed in a top-down manner with “everybody reporting to the CEO” and with the CEO creating the budget, which was the “ultimate in micro-management control.” His approach is much more bottom-up with key executives being responsible for identifiable areas; for these senior executives to be responsible for generating the budgets and to be held accountable for the areas under their purview. Peon is satisfied that he has made a great deal of difference in many areas at TSTT, but the one area he was not be able to make a difference was in his relationship with TSTT’s trade union, the Communication Workers Union. “I was accustomed to enlightened trade unions but what I found was an anachronistic approach,” said Peon, in an interview at his Edward St, Port-of-Spain office. Asked whether TSTT was overstaffed, Peon said: “Very, very much so,” and does not compare favourably with industry benchmarks. He said the union resisted his efforts to rationalise the company’s workforce to make TSTT more able to stand up to the competition from Flow and Digicel. “When I came here March 2007, TSTT had 2,777 employees. At the end of 2011, it had 2,641 people. If you compare what we do to what Flow and Digicel do, they have about 900 workers and a good percentage of those are contract employees,” he said. When people ask him to comment on the relationship with the union, he says it is almost like walking in the twilight zone.
In a business that depends heavily on satisfying the customers, Peon said the union was too heavily focused on defending the workers. He points to airlines like TWA, PanAM and Eastern Airlines which failed because the unions refused to accept the objective realities. He concludes that it would not be possible to transform TSTT with an “unenlightened” and “anachronistic” union. “At some stage, the shareholders are going to have to bite the bullet. It’s a very tough bullet....” said Peon. Giving an example of the union’s resistance to change, Peon cited the CWU insistence that TSTT’s trouble-call employees should not work after 4 pm—although that was when a significant percentage of the trouble calls for its Internet service came into the company. He got around this reluctance by outsourcing the trouble calls: first to India and then to Guatemala before returning the service to T&T. His impression of the company after a few years managing it was that it was a “hassle-full” rather than a “hassle-free” company. As the company moves more and more into the broadband and wireless era, it is focusing on putting in place systems that reduce the hassles that customers face.
He points to the automation systems implemented by Verizon and Singapore Tel and notes that the Internet now allows customers to do-it-themselves in terms of adding new channels to their television systems or more broadband. Some of these advances are coming soon to TSTT, he says, noting that the company is about to roll out wireless television. On the issue of the fierce mobile competition with Irish-owned Digicel, Peon said: “TSTT has kept market share against Digicel better than any other company in the Caribbean. “You don’t win the war, you win battles. With a competitor like Digicel, the war is forever.” He says TSTT is intent on maintaining its competitive edge against Digicel as it is about to launch a new, 4G mobile network—HSPA Plus, which will give customers much faster data speeds on their smart phones. Asked whether the recession in T&T would impact the company’s bottom-line for the year ended March 31, 2012, he said TSTT observers would be “pleasantly surprised” by the company’s results, which will be announced in May. About 85 per cent of a mobile company’s revenue comes from the basic service, he said.