The Telecommunications Services of T&T Ltd (TSTT) this week commenced the process to secure funding from the financial markets to cover the separation costs of its proposed restructuring exercise.
As such TSTT said it plans to finance the restructure without the need for a government guarantee.
“TSTT anticipates that, if given effect to, the high anticipated cost of the proposed restructure will be readily offset by savings in personnel costs, the elimination of maintenance costs associated with obsolete plant and technology and revenue from new streams of business, which will partially offset the loss of revenue from voice calling services, local and international,” a release from teh company stated.
In its release TSTT reiterated that the proposed restructure has been necessitated by several factors including the economic conditions brought on by the COVID-19 pandemic; increased consumer adoption of digital applications like WhatsApp and communications platforms like Zoom; which have precipitated the decline in local and international switched calling, the legacy costs associated with redundant technology in TSTT’s existing operating structure; and the continued industry-wide trend of substitution of lower-margin data services in place of voice services.
“These and other factors continue to have a crippling impact on the Company’s business and its results, with TSTT’s revenue falling by $453 million during the past financial year ended March 31, 2021 – 18 per cent less than the prior year,” it stated.
“TSTT has implemented various initiatives to counteract these debilitating conditions, including reducing non-personnel costs in response to these trends. These attempts notwithstanding, given the current challenges, the Company believes that for it to survive and get back to profitability over time it has no choice but to restructure its operations, and has made its proposals in this regard known to its employees and their representative unions,” the release stated.
TSTT is currently in consultations with its employees and their representative unions over these proposals.
“The Company is unable to make public the details of the consultation process itself, as the Company takes the view that to do so would be inconsistent with the principles of good industrial relations practice,” it stated.