23rd Report - Joint Select Committee on Government ... · PDF fileaci american concrete...

i

ON AN INQUIRY INTO THE

ADMINISTRATION AND OPERATIONS

OF THE

TELECOMMUNICATIONS SERVICES OF TRINIDAD AND

TOBAGO (TSTT)

Ordered to be printed with the Minutes of

Proceedings

and Notes of Evidence

PARLIAMENT OF THE REPUBLIC OF

TRINIDAD AND TOBAGO

Fifth Session (2014/2015)

TENTH PARLIAMENT

TWENTY-THIRD REPORT of the

Joint Select Committee Appointed to inquire into and report on Government

Ministries, Statutory Authorities and State Enterprises (Group 2)

Twenty-Third Report of the Joint Select Committee on Ministries, Statutory Authorities and State Enterprises (Group 2)

ii

An electronic copy of this report can be found on the Parliament website: www.ttparliament.orghttp://www.ttparliament.org/committee_business.php?mid=19&id=149&pid=25 The Joint Select Committee appointed to inquire into and report to Parliament on Ministries (Group 2), and on the Statutory Authorities and State Enterprises falling under their purview Contact the Committee’s Secretariat

Telephone: 624-7275 Extensions 2277/2288/2282, Fax: 625-4672 Email: [email protected]

mailto:[email protected]


iii

TWENTY-Third

Report

Of the

Joint Select Committee Appointed To Inquire Into And

Report On Government Ministries, Statutory

Authorities And State Enterprises (Group 2)

ON THE

The Administration and Operations of the

TELECOMMUNICATIONS SERVICES OF TRINIDAD AND

TOBAGO

Date Laid: HoR: May 29, 2015 Senate: June 08, 2015


iv

THE COMMITTEE

Dr. Victor Wheeler

CHAIRMAN

Mr. David Small Dr. Bhoendradatt Tewarie VICE-CHAIRMAN MEMBER

.

Dr. Tim Gopeesingh, MP Mr. Clifton De Coteau, MP Dr. Lester Henry MEMBER MEMBER MEMBER

Mr. Collin Partap, MP Mr. Kevin Ramnarine Dr. Lincoln Douglas, MP MEMBER MEMBER MEMBER

Mrs. Christine Newallo-Hosein Ms. Alicia Hospedales, MP Mr. Fitzgerald Jeffrey, MP

MEMBER MEMBER MEMBER


v

Committee Mandate and Establishment

1.1. Section 66 of the Constitution of Trinidad and Tobago declares, that not later than three

months after the first meeting of the House of Representatives, the Parliament shall appoint

Joint Select Committees to inquire into and report to both Houses in respect of Government

Ministries, Municipal Corporations, Statutory Authorities, State Enterprises and Service

Commissions, in relation to their administration, the manner of exercise of their powers, their

methods of functioning and any criteria adopted by them in the exercise of their powers and

functions.

1.2. Motions related to this purpose were passed in the House of Representatives and Senate on

September 17, 2010 and October 12, 2010, respectively, and thereby established, inter alia,

the Joint Select Committee to inquire into and report to Parliament on Ministries with

responsibility for the business set out in the Schedule as Group 2, and on the Statutory

Authorities and State Enterprises falling under their purview with regard to their

administration, the manner of exercise of their powers, their methods of functioning

and any criteria adopted by them in the exercise of their powers and functions.

1.3. The entities which fall under the purview of the Committee is attached as

Appendix I.

Powers of the Joint Select Committee

1.4. Standing Orders 71B (7) of the Senate and 111 of the House of Representatives delineate the core powers of the Committee which include inter alia:

to send for persons, papers and records;

to sit notwithstanding any adjournment of the Senate;

to adjourn from place to place;

to report from time to time;

to appoint specialist advisers either to supply information which is not otherwise

readily available, or to elucidate matters of complexity within the Committee's or

Sub-Committee's order of reference;

to communicate with any Committee of Parliament on matters of common

interest; and

to meet concurrently with any other Committee for the purpose of deliberating,

taking evidence or considering draft reports.


vi

Membership

1.5. The Committee comprises the following Members:

1. Dr. Victor Wheeler* - Chairman

2. Mr. David Small* - Vice-Chairman

3. Dr. Tim Gopeesingh, MP - Member

4. Mr. Clifton De Coteau, MP - Member

5. Dr. Lincoln Douglas, MP - Member

6. Mr. Collin Partap, MP - Member

7. Ms. Alicia Hospedales, MP - Member

8. Mr. Fitzgerald Jeffrey, MP - Member

9. Dr. Bhoendradatt Tewarie - Member

10. Mr. Kevin Ramnarine - Member

11. Mrs. Christine Newallo-Hosein1 - Member

12. Dr. Lester Henry - Member

Secretariat Support

1.6. The following officers were assigned to assist the Committee:

o Mr. Julien Ogilvie - Secretary

o Ms. Candice Skerrette - Assistant Secretary

o Ms. Katharina Gokool - Graduate Research Assistant

1 Mrs. Christine Newallo-Hosein replaced Ms. Raziah Ahmed w.e.f. 03.03.2015


vii

TABLE OF CONTENTS

Committee Mandate and Establishment .............................................................................. v

Powers of the Joint Select Committee ................................................................................... v

Membership .......................................................................................................................... vi

Secretariat Support ............................................................................................................... vi

Abbreviations………………………………………………………..………………………….2

Diagrams and Tables…………………………………………………………………………..3

Executive Summary……………………………………………………………………………4

Summary of Recommendations…………………………………………………………..…...6

Background ........................................................................................................................... 8

Objectives of the Inquiry ....................................................................................................... 9

Conduct of the Inquiry ......................................................................................................... 10

Key Issues, Findings and Recommendations.……..…………………………………….13-43

Appendix 1……………………………………………………………………………………..45

Appendix 2…………………………………………………………………………………….50

Appendix 3…………………………………………………………………………………….62

Appendix 4…………………………………………………………………………….……...107


1


2

ABBREVIATIONS

ACI AMERICAN CONCRETE INSTITUTE

AG AUDITOR GENERAL

ASTM AMERICAN SOCIETY OF TEST MATERIALS

BNPAT BUDGETED NET PROFIT AFTER TAX

C&W CABLE AND WIRELESS

CAPEX CAPITAL EXPENDITURE

CCTV CLOSED CIRCUIT TELEVISION

CDR CUSTOMER DATA RECORDS

CEO CHIEF EXECUTIVE OFFICER

CHOGM COMMONWEALTH HEADS OF GOVERNMENT MEETING

COLA COST OF LIVING ALLOWANCE

CWC CABLE AND WIRELESS COMMUNICATIONS

CWU COMMUNICATIONS WORKERS UNION

EPA ESTATE POLICE ASSOCIATION

ESA EXECUTIVE SECRETARIES ASSOCIATION

HR HUMAN RESOURCES

ICT INFORMATION AND COMMUNICATIONS TECHNOLOGY

IOC INTERCEPTION OF COMMUNICATION

IPTV INTERNET PROTOCOL TELEVISION

IXP INTERNET EXCHANGE POINT

KPI KEY PERFORMANCE INDICATORS

MFO MARKET FACTS AND OPINONS

MPA MINISTRY OF PUBLIC ADMINSTRATION

MPU MINISTRY OF PUBLIC UTILITIES

MST MINISTRY OF SCIENCE AND TECHNOLOGY

NEL NATIONAL ENTERPRISES LIMITED

NPAT NET PROFIT AFTER TAX

OSH OCCUPATIONAL SAFETY AND HEALTH

OSHC OCCUPATIONAL SAFETY AND HEALTH COMMITTEE

SEC SECURITIES EXCHANGE COMMISSION

STIP SHORT TERM INCENTIVE PLAN

SWOT STRENGHTS WEAKNESSES OPPORTUNITIES THREATS

TATT TELECOMMUNICATIONS AUTHORITY OF TRINIDAD AND TOBAGO

TIA TELECOMMUNICATIONS INDUSTRIES ASSOCIATION

TSTT TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO

TTD TRINIDAD AND TOBAGO DOLLAR

VEERP VOLUNTARY ENHANCED EARLY RETIREMENT PLAN

VSEP VOLUNTARY SEPERATION OF EMPLOYMENT PLAN


3

DIAGRAMS & TABLES DIAGRAMS

DIAGRAM NO.

DETAILS PAGE NO.

1 Strategic Plan 16

TABLES

TABLE NO. DETAILS PAGE NO.

1 TSTTs profit margin in relation to Gross and Net Profits for the years 2008 to 2013

19

2 Revenue Allocated For Remunerating Executive Managers, Managers, Contract Staff, Unionised Staff and Short-Term Professionals for the Period 2010-2014

22

3 Breakdown of the number of employees by work category for 2014

25

4 TSTTs management to employee ratio for the years 2010-2014

26


4

EXECUTIVE SUMMARY

At its thirty-second meeting held on Friday May 09, 2014, the Committee resolved to pursue an

inquiry into the Telecommunications Services of Trinidad and Tobago. The Committee

determined that an inquiry into this Company was necessary after considering certain issues which

appeared to be affecting the operations of the company including: protest action taken by TSTT

Workers in 2014 as a result of their dissatisfaction with a three percent increase in wages, the

liberalisation of the telecommunications market and the potential impacts this may have had on

the Company. In reviewing the background information on TSTT, the Committee also noted that

the Company had recorded a loss in 2011 after several years of attaining profits.

The Committee adopted its standard methodology for gathering data and obtained both oral and

written evidence based on the defined objectives of the inquiry. However, the Committee’s

approach was modified to facilitate the Company’s request that certain evidence/information that

it deemed to be commercially sensitive, not be disclosed during the public hearing of May 9th,

2014. This request was acceded to and a private hearing was convened on July 11, 2014 in order

that the Committee may engage the Company on areas/issues that TSTT considered classified.

Further to the evidences received, the Committee took particular note of what in its view, were

some of the significant issues and developments concerning the operations of the Company.

These were as follows:

the nature of the shareholders agreement in particular, the veto power held by Cable and

Wireless in relation to capital investments;

the Company’s strategic direction taking into account it major strategic objectives for the

period 2013/2014-2018/2019 that include an exponential expansion in technology and mobile

infrastructure;

the fact that the financial condition of the Company has declined over the period 2011 to

2014;

the apparent “top-heavy” organisation structure compounded by an above industry average

wage bill that has been significantly eroding the company’s revenues;

the justification for the Company’s management bonuses and incentive programme;


5

the inadequate provisions for protective equipment set out in the Collective Agreement

between the Company and the representing Union;

the lack of reporting of financial and administrative records to the Auditor General and

Parliament respectively;

the systemic and infrastructural issues affecting the company’s mobile network;

the security arrangements regarding call data records;

the Company’s relationship with its stakeholders; and

the need for legislative modifications.

As a consequence, we formulated appropriate recommendations to address these issues. A

summary of these recommendations follows this Executive Summary and is also contained in the

body of this report.

We anticipate that the Parliament, TSTT, the Ministry of Public Utilities, Ministry of Science and

Technology, the TATT and other stakeholders would give due consideration to the findings and

recommendations contained in this Report with a view to enhancing the operations of the

Company. The Committee looks forward to reviewing the Minster’s response to this Report,

which becomes due, 60 days after it is presented to the Houses of Parliament.


6

SUMMARY OF RECOMMENDATIONS

The following is a summary of the recommendations proposed by the Committee:

i. that TSTT keep the general public apprised of the impact that the recent changes

in its shareholding has/will had/have on the way it conducts its business;

ii. that in the Ministerial Response to this report, the Parliament be provided with an

update on the execution of the Divestment Schedule as it concerns the shares

currently held by C&W;

iii. that the Company develop a properly tailored public relations campaign with a

view to rebuilding the Company’s brand and highlighting the Company’s strategic

direction (in general terms) for the next 5 to 10 years and how this will be achieved;

iv. the Committee endorses the Company’s move to downsize and rationalize its work

force through VSEP and recommend that it commission an independent Human

Resource Audit and analysis of it compensation regime;

v. that the Company examine other areas of its operations with a view to making

these areas more efficient and or cost effective;

vi. that the Company examine its Management to Employee Ratio in order to

determine whether the prevailing ratio of 1:13 or 1:5 (as the case may be) is the most

suitable arrangement for optimizing its Human Resources and for effectively

delivering its services;

vii. that the Company review the STIP in the context of its current financial

circumstances and determine whether the following can be explored:

a downward adjustment in the value of the financial rewards which are

distributed to beneficiaries under the programme;

an extension in the period for which the benefits apply from one year to at least

two years.


7

viii. the Company should conduct a public awareness campaign to build community

support particularly as it pertains to the establishment of cell towers in areas where

there are network coverage gaps;

ix. that Parliament, through the Ministerial Response to this report, be informed of

the findings of the independent audit that the Company commissioned Ericson to

conduct;

x. that the Company review its security measures, procedures and protocols in place

for safeguarding ‘Call Data Records’, with a view to ensuring that if opportunities

for breaches exist they are eliminated or considerably minimized. Consideration

ought to be given to limiting as far as possible, the number of parties involved in

the data retrieval process.


8

2. INTRODUCTION

Background

2.1. The Telecommunications Services of Trinidad and Tobago (TSTT) is a limited liability

company which is majority owned by the state through the National Enterprises Limited

(NEL), a publicly traded company which holds 51 % of its shares. The remaining shares

of 49 % are presently held by the Cable and Wireless (West Indies) Limited (C&W).

2.2. The Company held a monopoly in providing telecommunication services in Trinidad and

Tobago prior to the opening of the market, beginning in 2005.

2.3. Since then, the business of the Company has expanded from being a landline, internet and

mobile provider to offering services such as voice, high speed broadband internet/data

services, security and alarm monitoring services; and internet-protocol-TV (IPTV)

services.

2.4. Furthermore, in January, 2014 the Company launched a pilot Gigabit Community, the first

of its kind in the region, by configuring its network and using fiber optic connections to

allow for fiber optic access speeds of up to 1 gigabit per second.2

2.5. The Company is regulated by the Telecommunications Authority of Trinidad and Tobago

(TATT) which was established under the Telecommunications Act chapter 47:31 no. 4

of 2001 and began operating in July 2004 given the proclamation and full passage of the

Act and a Telecommunications (Amendment) Act, 2004.

2.6. Notwithstanding, the Committee noted the following issues relative to TSTT as follows:

i. the status of the shareholder agreement between the Company (NEL) and its co-

owner C&W;

ii. protests by TSTT Workers in 2014 regarding:

2 http://www.tstt.co.tt/news/blink-reveals-first-gigabit-community


9

a. an unsatisfactory three percent increase in wage and salaries based on

negotiations held in September3 and November, 2013;4 and

b. a delay in the payment of salaries to approximately 2,200 workers in January

2014. 5

iii. the Interception of Communications (Amendment) Act, 2010 was assented to on

December 20, 2010 thereby providing for public or private communications, being

transmitted by means of a public or private telecommunications network, to be

lawfully intercepted. 6

iv. the apparent ambiguity regarding the role of the Ministries of Science and

Technology and Public Administration in contrast with that of the Company’s line

Ministry of Public Utilities in relation to guiding “… the strategic direction and policy

formulation of the telecommunications and broadcasting sectors.”7

2.7. Based on the foregoing and taking into consideration the importance of a modern and

efficient telecommunications service to a striving economy, the Committee concluded

that the administration and operations of TSTT ought to be the subject of an inquiry.

Objectives of the Inquiry

2.8. At a meeting held on April 11, 2014 the Committee agreed that the following will comprise

the objectives of the inquiry:

i. To acquire insight into the Company’s financial condition.

ii. To determine the strategic direction of the Company for the next five (5)

years.

iii. To determine the adequacy and effectiveness of the Company’s policies and

procedures as it pertains to ensuring accountability, transparency and sound

3 https://www.guardian.co.tt/news/2013-09-28/tstt-workers-want-their-100-million-or-else 4 http://guardian.co.tt/news/2013-11-16/tstt-workers-ramp-protests 5 http://guardian.co.tt/news/2014-01-25/tstt-workers-stage-protest-over-late-pay 6Medium Term Policy Framework 2011-14, pg 31 and 76.

http://www.finance.gov.tt/content/Medium-Term-Policy-Framework-2011-14.pdf 7 Medium Term Policy Framework 2011-14 http://www.finance.gov.tt/content/Medium-Term-Policy-

Framework-2011-14.pdf [See page 120 No. 17 Ministry of Public Administration No. 6 in Table at Appendix II]

http://www.finance.gov.tt/content/Medium-Term-Policy-Framework-2011-14.pdf


10

Corporate Governance in its operations and to determine whether these are

being adhered to.

iv. To be informed of the major achievements/milestones realized by the

Company over the past five (5) years and to gain an appreciation of the

challenges faced by the Company.

v. To assess the impact of the opening of the telecommunications market on

the Company vis-à-vis the introduction of other telecom service providers.

vi. To assess the standard of service delivery to customers.

vii. To determine the effectiveness of the Company’s infrastructure maintenance

and upgrade systems.

viii. To understand the relationship between the Telecommunications Authority

of Trinidad and Tobago (TATT) and TSTT in meeting the regulatory

demands of the telecommunications industry.

ix. To understand the relationship between TSTT, its line Ministry (Public

Utilities) and the Ministry of Public Administration in guiding the Company

in terms of its strategic direction.

x. To determine the status of the agreement between TSTT and the Cable and

Wireless Company and the challenges emanating from the merger.

Conduct of the Inquiry

2.9. On May 9, 2014 a public hearing was held with representatives of the Ministry of Public

Utilities (MPU) and TSTT at which time the Committee questioned the officials on the

various matters outlined in the Inquiry Objectives. Prior to the public hearing, notice was

given as to the general objectives of the inquiry and in response, written submissions were

received from the TSTT. These responses informed some of the questions asked during

the hearing.


11

2.10. At the public hearing held on May 9, 2014, the Committee established that there was

need for further inquiry into certain specific aspects of the company’s operations.

However, the company was concerned about discussing certain areas of its operations

that it believed can be detrimental to its commercial or strategic ambitions. As such, the

company requested that discussions on these matters be conducted in private. The

Committee conceded and an in camera (private) meeting was held with the representatives

of the MPU and TSTT on June 11, 2014.

2.11. The MPU, TSTT and the TATT were represented at the meetings of Friday May 9, 2014

and Wednesday July 11th, 2014 by:

Name of Official Portfolio Public hearing

09.05.2014

In-camera hearing

11.07.2014

Mrs. Jacinta Bailey-Sobers Permanent Secretary, Ministry of Public Utilities

Mr. Victor Jones Deputy Permanent Secretary, Ministry of Public Utilities

x

Ms. Anika Farmer Director, Legal Services, Ministry of Public Utilities

Mr. George Hill Ag. Chief Executive Officer (TSTT) x

-Mr. Rakesh Goswami EVP Government and Enterprise Services/ Ag. CEO (TSTT)

Mr. Gerard Cooper EVP Finance/ Chief Financial Officer (TSTT)

Mr. Charles Carter EVP Legal, Regulatory, Corporate Secretary (TSTT)

Mr. Ronald Walcott EVP Mobile Services and Operations (TSTT)

Mr. Faied Mohammed Head Business Effectiveness (TSTT) x


12

Mr. Trevor Deane EVP Strategic Analytics, Corporate Research and Carrier Services (TSTT)

Mr. James Legall EVP Chief Technology Officer (TSTT) x

Mr. Harigobin Jhinkoo EVP Human Resources (TSTT) x

Mr. Cris Seecheran Chief Executive Officer, Telecommunications Authority of Trinidad and Tobago (TATT)

x

Ms. Nievia Ramsundar Corporate Secretary/Executive Officer, Legal and Regulatory Affairs (TATT)

x

2.12. Subsequent to the public hearing of May 9, 2014, and the in-camera hearing of July 11,

2014 additional information was requested from the TSTT. The requested information

were submitted under letters dated June 2, 2014 and August 25, 2014 respectively.

2.13. The Committee also received written comments from the following stakeholders:

1. The Ministry of Science and Technology;

2. Communication Workers' Union; and

3. Mr. Afra Martin Raymond.

2.14. The Minutes of the Meeting during which the public hearing was held are attached as

Appendix II and the Verbatim Notes as Appendix III.


13

KEY ISSUES, FINDINGS AND RECOMMENDATIONS

THE STATE OF THE SHAREHOLDERS AGREEMENT BETWEEN

THE COMPANY AND CABLE AND WIRELESS

3.1.1. The Shareholders Agreement which governs the relationship between the TSTT and Cable

and Wireless Communications Public Limited Company was established since December 20th,

1989. The Committee was informed that Cable and Wireless and NEL (majority shareholder)

hold 49% and 51% of the company’s shares respectively. The Company is registered as a private

limited liability company under the Companies Act, Chap. 81:01 and the shares originally owned

by the Government and Cable and Wireless were transferred by Deed of Adherence to NEL.

3.1.2. The Company’s management makes recommendations to the Board with respect to

finances. The composition of the board includes five members appointed by NEL (inclusive of

the Chairman) and four members appointed by Cable and Wireless. The Committee was informed

that Shareholder discussions also occur between the MoFE and Cable & Wireless.

3.1.3. With regards to the decision making process at the Company, the Committee was

informed that the following four (4) sub- committees were established to assist in the decision

making at the corporate governance level which comprises appointed Directors from both NEL

and Cable and Wireless:

1. Audit Committee;

2. Human Resource and Compensation Committee;

3. Regulatory, Legal and Public Policy Committee; and

4. Tenders Committee.

3.1.4. These Committees meet at least once per quarter however, the Tenders Committee meets

more regularly to facilitate the business of the Company. In addition, with regards to decisions

relating to Capital Expenditure, we noted that Cable and Wireless holds veto power over capital

expenditure.


14

3.1.5. Subsequent to the Committee’s meetings with TSTT, TATT announced via print media8

the decision of the Cable and Wireless Communications (CWC) Public Limited Company to

dispose of its shares in TSTT. It was indicated that subsequent to consultations held between the

Cable and Wireless and NEL an agreement outlining a process for the orderly disposal of Cable

and Wireless shareholdings in TSTT as well as the suspension of CWC rights under the

Shareholders’ Agreement (immediately upon receipt of the said approval) was entered into. The

complete divestment schedule was expected to be completed within one year of the decision,

which is extendable by six months.

FINDINGS AND RECOMMENDATION

3.1.6. Given recent developments regarding the participation of Cable and Wireless in TSTT,

the Committee has reserved pronouncing in more detail on the now former shareholder agreement

formed in 1991. Notwithstanding, we noted the agreement which lasted for approximately twenty-

four years would have benefited TSTT in terms of harnessing the resources of a major

telecommunication company within the region.

3.1.7. The evidence received during the inquiry did not allude to any challenges/issues which

existed in relation to the shareholder agreement between NEL and C&W. Notwithstanding, we

believe that the reasons for C&W’s exit from the agreement should be publicly disclosed save for

information that may be considered commercially classified. TSTT is certainly encouraged to take

note of the factors which resulted in C&W’s departure, particularly those related to the manner in

which its operations are managed.

3.1.8. We expect that the decision making arrangements currently in place will require

modifications to accommodate the new partner. We imagine that there will be new ideas and the

possibility of changes to the organisation’s activities and structure. We also presume that different

arrangements regarding capital expenditure will have to be made.

3.1.9. As such, we recommend that TSTT keep the general public apprised of the impact

that the recent changes in its shareholding has/will had/have on the way it conducts its

8 The Saturday Express Newspaper on April 4th, 2014


15

business. Further we recommend that in the Ministerial Response to this report, the

Parliament be provided with an update on the execution of the Divestment Schedule as it

concerns the shares currently held by C&W. This update should also provide information

on how the change in the ownership of the Company has or is expected to impact its

strategic direction, financial status, products and services.

STRATEGIC DIRECTION

3.2.1. The Committee was informed that TSTTs strategic direction is based on a five (5) year

long-term recurring Strategic Plan (2013/2014-2018/2019) as recommended by the Management

of the Company and approved by its Board of Directors. The Strategic Plan was also submitted

to the Chairman and Directors of the NEL, the Corporation Sole and the Minister of Public

Utilities. Noteworthy, was that the Strategic Plan was developed in response to the Company’s

declining profits. As such, the objectives of the plan focus the attention of the Company on areas

requiring recourse so as to ensure that the Company remains profitable, provides returns to

stakeholders and becomes a more customer centric organisation. Diagram 1 illustrates the primary

areas of focus of the Company’s strategic thrust.


16

DIAGRAM 1

Strategic Plan

3.2.2. The three strategic areas of focus include: the wireless area; the broadband area and in

the Enterprise and Government Services. It was stated that to achieve the desired level of success

it was necessary for the Company to invest in automation, infrastructure and organisational

transformation.

3.2.3. With regards to automation, the Company intends to focus on service delivery by

investing in automating its front and back office processes to allow customers to log into the

Company’s web portal and access its services online via the internet. Further, there are plans to

establish customer service centres that will decrease the need to call the Company’s hotline or to

visit the Company’s public offices. There are also plans to introduce self-installation wireless broad

band devices, to increase the supply chain of operations and to focus on more e-purchases.

3.2.4. As it pertains to infrastructure, a significant infrastructure development that is provided

for in the strategic plan is Fixed Wireless Internet Broadband. Thus far, the Company has four

macro sites on trial and other detailed plans. It is expected that by the end of 2014 there should


17

be an increase in the amount of fixed wireless internet services available which will be directed

mainly at areas where there is no wired internet.

3.2.5. As well, it was mentioned that within the first two years of the strategic plan, the Company

was expected to achieve 95 per cent broadband coverage and access in both Trinidad and Tobago.

The attainment of this goal would involve a combination of both wired and wireless technology

particularly wire fibre to the home or curb in cities and highly densely populated areas and wireless

broadband in rural areas at a minimum of 2 megabits and with a maximum capacity on a wireless

network to 10 megabits. Additionally, the Company is also considering the use of mobile caravans

to promote its services.

3.2.6. It was indicated that the capital investment in relation to the five year strategic plan equates

to approximately $4.3billion. Specifically, it was indicated that to facilitate wireless broadband the

Company intends to invest between TT$300 million to TT$500 million during the first two years

of the plan. At the hearing it was also indicated, that generally, the priority areas of the Strategic

Plan are the mobile and broadband areas. For example, for every dollar spent (capital expenditure)

65 or 70 cents would be dedicated to mobile and broadband services.

3.2.7. Further we took note that the first year of the plan also entailed a voluntary separation

exercise and investment in the mobile network. In the second year of the plan, it was indicated

that the majority of investments will be directed at enhancing ‘Blink’ services, while the third year

will treat with marketing in terms of rebranding, repackaging and segmentation. The Company

forecasted a rise in profits over the next four years of the plan. At the time of the hearing, the

Company was in year two of its Strategic Plan.

FINDINGS AND RECOMMENDATIONS

3.2.8. In essence, the evidence received suggested that certain internal challenges and the

changing dynamics of the telecommunications industry, made it an imperative for the Company

to assess its operations and modify it strategic approach. Under the circumstances, the Company

was required to dedicate additional resources to its products and services which demonstrate the

highest growth and earning potential. With regards to its internal challenges, it appeared that aged

infrastructure, lagging technology, a highly unionised environment compounded by a higher than


18

average wage Bill, among other things, have hindered the Company’s ability to sustain the growth

it achieved in previous years.

3.2.9. The remedial strategies adopted by TSTT as articulated in its most recent Strategic Plan,

appear to have the potential of enhancing the Company’s capacity to, among other things:

deliver its services more efficiently;

position it to be able to respond more expeditiously to changes in the market and in

technology;

provide better service to its customers both in Trinidad and in Tobago;

rationalize its operations to eliminate unsustainable elements.

3.2.10. Some Members of the Committee expressed the view that TSTT’s recent strategic

adjustments were long overdue particularly given the fact that prevailing market conditions are

much more different from the era when the company held a monopoly in the telecom industry.

3.2.11. Notwithstanding, the Committee was encouraged that the Board and management have

finally formulated strategies for rejuvenating the Company. We also reflected on the fact that

unlike it competitors, TSTT, though financially self-sufficient, may be influenced by

government/State policy positions, which at times place it at a disadvantage compared to its rivals.

For instance, the highly unionised atmosphere the Company operates in has no doubt been a

major driver of the company’s significant personnel costs. As one of the few profitable state

controlled enterprises, we are deeply concerned with the declining profits of the company and

strongly believe that fundamental adjustments must be instituted to ensure that TSTT remains a

viable enterprise.

A. We believe that more must be done to build public confidence in TSTT’s vision

and future aspirations. A significant amount of work is needed to rebrand and

reposition the Company as a leader in the local telecom market. As such, we

recommend that the Company develop a properly tailored public relations

campaign with a view to rebuilding the Company’s brand and highlighting (in

general terms) the Company’s strategic direction for the next 5 to 10 years and


19

how this will be achieved. The PR campaign must also demonstrate how these

strategic plans will translate into better services for customers.

B. Given the undisputed fact that the Company’s wage bill is above average, we

endorse the Company’s move to downsize and rationalize its work force

through VSEP and recommend that it commission an independent Human

Resource Audit and analysis of it compensation regime. We trust that these

interventions along with negotiations with the relevant unions will result in a

reduction in the company’s personnel expenditure. This is an imperative, since

in our view, sustaining such significant overheads in the future, has the

potential of undermining the company’s competitiveness.

FINANCIAL CONDITION

3.3.1. Since 1991 the Company has remained profitable with the exception of one year (2011)

when significant changes were made to its mobile network. Therefore, the Company’s initial

shareholder equity has increased from $537 million to $3.2 billion as at December 31, 2013.

TABLE 1

TSTTs profit margin in relation to Gross and Net Profits for the years 2009 to 2013

TTD$m

2009 2010 2011 2012 2013

Gross Revenue

3,026

3,068

3,005

2,989

2,945

Gross Profit

2,355

2,387

2,274

2,274

2,223

78% 78% 76% 76% 75%

Profit After Tax

384

202

39

91

49

13% 7% 1% 3% 2%

3.3.2. Given the information outlined in Table 1 above it is clear that the gross revenue of the

Company has been relatively stagnant over the period 2009 to 2013. The Committee took note

that this occurred despite increases in capital investment that amounted to approximately $4 billion


20

over the past 5 years. Similarly, the Committee noted the decrease in profit after tax in 2011. We

were informed that this decrease was incurred as a result of:

a decline in revenues from 2010/2011 mainly due to a decrease in Blink revenues coupled

with the exclusion of revenues relating to Commonwealth Heads of Government

(CHOGM) and Summit Revenues which were only earned in 2009/2010;

an increase in cost of sales as a result of aggressive subsidies on mobile handset from

2010/2011 onwards;

an increase in the maintenance and repair costs of software licenses and simultaneous

increasing costs of TSTT’s legacy outside plant servicing its fixed voice subscribers;

the implementation of an Industrial Court ruling to award the 2006 and 2007 collective

agreement of the major representative bargaining unit which allowed for a significantly

greater amount for salary increments. This coupled with the consolidation of Cost of

Living Allowance (COLA) for this period outweighed the amount discussed with the

Court and the sum stipulated in its financial statements which was paid in 2010; and

the Company’s (mobile) subscriber acquisition costs along with other operating costs and

depreciation expenses.

3.3.3. Interestingly, we were informed that the increase in profits in 2012 occurred

spontaneously. With regards to its revenue base, it was submitted that despite facing competition

in all of its five areas of services, the Company was able to maintain an average revenue base of

$3 billion during the period 2009 to 2013. We were informed that the demand for fixed line

services are on the decline, but the broadband, Closed Circuit TV (CCTV) and home alarm

monitoring services have been prospering. Conversely, the least profitable service has been the

IPTV and Paystations. It was submitted that investments in the mobile network allowed the

Company to sustain its revenues despite a drop in its subscriber base.

3.3.4. Notwithstanding, the Company’s profits over the period 2009-2013 has generally been on

the decline, the Committee was informed that subject to the execution of its Strategic Plan, it was

expected that it would realise an increase in profits in excess of $100 million annually for the final

four (4) years of the five (5) year plan.


21

Use of Profits

3.3.5. Annually, fifty percent (50%) of TSTT’s profits are declared and distributed as dividends

in accordance with the Shareholders’ Agreement. Therefore, the Board has no determination over

utilization of the dividends rather it is predefined by the shareholders’ agreement. However, the

Board and the management mutually determine the utilisation of the remaining fifty percent (50%)

with regards to capital and operational expenditure.

Capital Expenditure

3.3.6. The Committee was informed that the funding for Capital Expenditure is either by equity

debt or internal financing (cash) on the balance sheet. During the period 2009-2013, capital

expenditure continued to decrease except in 2013, when the Company underwent a major

upgrade/overhaul of its mobile network. As a result, Capital Expenditure decrease from $932Mn

in 2010 to $347Mn in 2014. It was explained that it was necessary for the Company to continuously

engage in upgrading its network so that, new types of services can be offered to customers.

Additionally, it was indicated that the nature of the Telecommunications industry is highly capital

intensive and by upgrading its network, the Company was able to introduce and expand data

services thereby allowing for a slight fluctuation in mobile revenue during the period. Capital was

also invested in the ‘Blink’ service to introduce IPTV and the Broadband service which generated

revenue in the early period and sustenance in the latter years nevertheless fixed line revenues

decreased. Further details on Capital Expenditure and Revenue and Revenue by Major Streams of

Services for the period 2010-2014 are in Appendix IV.

Investment portfolio

3.3.7. The Company does not have an “investment portfolio”, rather the majority of its available

cash is placed at various financial institutions such as Republic Bank, Scotia Bank and the Unit

Trust Corporation. However, we were told that the Company entered into a bond of over

TT$1.5billlion on the local market, given that the interest rates of the local financial community

are favourable. The Company indicated that it was in the final stage of closing the ten year loan.

The Company met with the Corporation Sole and received a letter of non-objection to proceed

with the financing, a financial roadshow was conducted which resulted in the selection of ANSA


22

Finance9 as the underwriter. The Company expressed that given the bond, there will be no burden

on the Government regarding financing. Further, it was indicated that part of the bond will fund

a Voluntary Separation of Employment Programme in the sum of $750 million.

High Personnel Cost

3.3.8. The Committee was informed that the Company’s employee cost base is not in alignment

with international benchmarks or other Telco’s. We also noted that an estimated $700 million is

spent on paying salaries and wages annually. Table 2 below outlines the percentage of Company’s

revenue allocated for remunerating Executive Managers, Managers, contract staff, unionised staff

and short-term professionals for the period 2010-2014.

TABLE 2

Revenue Allocated For Remunerating Executive Managers, Managers, Contract Staff,

Unionised Staff and Short-Term Professionals for the Period 2010-2014

3.3.9. As it pertains to reviewing the Company’s remuneration policy, there is no fixed schedule

for doing so, instead reviews are performed when appropriately approved or directed by the Board

of Directors. Currently, a review of Executive Compensation is in progress. The last review

conducted by the Human Resource and Compensation Committee HRCC was in 2011/2012 and

resulted in all Management employees (excluding Executives) receiving between 5% to 9%

increases on their basic salary.

9 http://www.ansabank.com/auto-financing/


23

3.3.10. It was reported that Court awards to workers and management bonuses are funded

through the Company’s wage bill. However the costs are funded through the incremental

profits of the Company over the Board Approved Financial Targets set in the relevant financial

year.

3.3.11. As a consequence, the Company embarked on a strategy to reduce personnel cost by

engaging in organizational transformation and offering a Voluntary Separation of Employment

Plan (VSEP) and Voluntary Enhanced Early Retirement Plan (VEERP) to all permanent

employees. During the period 2009 to 2014, 608 employees accepted VSEP. This consists of 288

management staff, 304 members of the Communication Workers’ Union, 6 members of the

Executive Secretary’s Association and 10 members of the Estate Police Association.

3.3.12. It was indicated that the Company reserved the right to accept or deny applications from

employees wishing to separate voluntarily if it deems the competencies of the applicant to be

essential to the organisation.

3.3.13. We were informed that the Company also offered outplacement services including

counselling and assistance programs, for instance, the Employee Wellness and Assistance

Programme. In addition, financial counselling to provide applicants with advice on sensible

management of their finances through preparation and discussion of a personal financial plan with

a financial consultant was provided.

3.3.14. We also noted that the Company’s submission indicated that a gap analysis of the skill set

required for employees, re-training, re-tooling and review of business work flow processes would

all be essential components of the transformation exercise which will achieve:

▪ Reduced Personnel Costs;

▪ Restructuring – new Org. Charts;

▪ Opportunities for Training in new career path; and

▪ Business Process Review.


24


3.3.15. The information received in relation to the Company’s financial condition suggests that

there was an urgent requirement for the Company to increase its revenue base and to minimise

and or eliminate unessential expenditure. It was also clear that the Company was cognisant of this,

but it appeared that there were certain factors which were hindering it’s ability to effect the

necessary changes in a more expeditious manner.

3.3.16. It was evident that the Company was struggling to maintain its profits. We concur that the

high personnel costs endured by the Company severely impacted on the revenues of the Company,

therefore we endorse the restructuring of the organisation via the VSEP and VEERP. As well,

although we were informed that the Company anticipates an increase in profits in excess of $100

million annually during the subsequent years of the plan, this was in contrast with significant

amount of debt it will be adding to its debt portfolio in terms of the $1.5 billion dollar bond that

it intends to issue. As such, it would be fair to assume that any additional revenue that may accrue

from the “transformation” of the Company’s operations will be used to service the Company’s

expanding debt portfolio.

3.3.17. Moreover, it would be interesting to assess what impact the recent exit of C&W from the

Company may have on the distribution of annual profits, since in prior years 50% of the profits

were allocated based on the shareholder agreement. In addition, we took note that the industry is

highly capital intensive and significant investments in technological and infrastructural upgrades

is an imperative for achieving success. However, what must be managed is the impact such

investments may have on the Company’s financial condition in that the 2013 network overhaul

resulted in a major reduction in profits in that year.

3.3.18. We endorse all measures being undertaken to rationalize the Company’s

operations and reduce unwarranted expenditure. In addition, to offering VSEP and

revising the incentives paid to managers, we recommend that the Company examine other

areas of its operations with a view to making these areas more efficient and or cost

effective.


25

MANAGEMENT TO EMPLOYEE RATIO

3.4.1 Table 3 outlines the number of employees by work category as at 2014, which amounted

to two thousand four hundred and eighty-nine (2,489) employees inclusive of those on contract.

In addition, the Company had twenty (20) Graduates in Training assigned to the Human

Resources Department and placed in various line departments for a period of eighteen (18)

months.

TABLE 3

Breakdown of the number of employees by work category for 2014


26

3.4.2. The Committee also noted from the information set out above that the Company has

approximately five hundred (500) managers consisting of section managers, other managers and

professionals which therefore suggests that the Company is operating with a management to

employee ratio of 1:5 employees. The Company’s Management to Employee Ratio 2010-2014 is

stated in Table 4 below.

TABLE 4

TSTTs MANAGEMENT TO EMPLOYEE RATIO FOR THE YEARS 2010-2014


3.4.3. There appeared to be some inconsistencies in the information the Company submitted

regarding its Management to Employee ratio. Based on a calculation of the figures quoted in

paragraph 3.4.2. above, it would be fair to state that the Company’s Manager to Staff ratio is 1: 5.

However, the statistics quoted in Table 4 above suggest that the ratio during the period 2010 to

2014 was 1:13. Nevertheless, we deduced that if the Company does have a high percentage of

managers to staff, consideration ought to be given to determining whether such a situation is

beneficial or adverse to the company’s optimum output/capacity.

3.4.4. We recommend that the Company examine its Management to employee ratio in

order to determine whether the prevailing ratio of 1:13 or 1:5 (as the case may be) is the

most suitable arrangement for optimizing its Human Resources and for effectively

delivering its services.


27

COMPENSATION ARRANGEMENTS FOR EXECUTIVE

MANAGEMENT

Remuneration for Executive Managers

3.5.1. The Committee was informed there are thirteen (13) Vice-Presidents who have salaries of

approximately TT$100,000 per month. The following information on salary and emoluments was

provided:

Chief Executive Officer: US$300,000 monthly;

EVP, Finance/ Chief Financial Officer: TT$75,000 monthly;

EVP, Mobile Services and Operations: TT$90,000 monthly;

EVP, Legal, Regulatory/Corporate Secretary: TT$90,000 monthly;

EVP, Government and Enterprise Services: US$250,000 annually; and

EVP, Strategic Analytics, Corporate Research and Carrier Services: TT$90,000

monthly.

3.5.2. The Company clarified that half of its 500 managers are non-unionized professionals.

Short Term Incentive Programme (STIP)

3.5.3. The Committee was informed that the Company has a Risk Based Compensation or Short-

Term Incentive Plan (STIP) which runs annually from April to March. The plan is specifically

directed at the C.E.O., Executives, and Management and is aimed at increasing the performance

of the Company.

3.5.4. Noteworthy, is that the plan came in operation in 2007, following the simultaneous freeze

in salaries of all management staff at their current levels. It was also noted that during the period

2007-2012 there were no general salary increases for management staff. As such, the STIP was

therefore described as a Salary at Risk payment mechanism.

3.5.5. We were informed that the procedure to participate in the STIP involves a pre-qualification

process which comprises a series of targets to be met namely “Gates”. It is mandatory that these

gates be passed for an individual to be eligible for entry into the STIP. The STIP is also based on

other targets or gates, for instance, ‘personal gates’, ‘group gates’ and ‘company gates’.

Compensation is based on the Company’s pay for actual performance philosophy and its ability


28

to issue funds for this purpose. Therefore, payment is only made if established targets are met or

exceeded, however failure to achieve the target will result in less or no compensation.

3.5.6. The STIP is calculated if the Actual Net Profit after Tax (NPAT) at the end of a financial

year exceeds the approved Budgeted Net Profit after Tax (BNPAT). Therefore, the STIP can be

afforded by the Company because the plan is self-funding.

3.5.7. In addition, we were informed that the administration of the compensation is performed by

the Human Resources Group which reports to the HR and Compensation Committee of the

Board. Financial targets are established and measured by the Finance Group and verified by

Auditors. As well, the actual payments to Management are audited by both internal and external

auditors (Ernst and Young). As a result, the plan is described as fair as it rewards top performers

and aids to support the organisation’s strategic goals. Further, it has the potential to positively

impact the Company’s annual profits by thrusting it above its target.

3.5.8. As it pertains to the STIP payments, we were informed that there were no payments made

under the STIP for the financial year 2013-2014 because the target was not met. However,

increases were awarded for the period 2007 to 2013 to management. Total Net Payments to

Management were as follows:

2009/2010 –53,694,435.83 million 2010/2011 – 65,113,197.35 million 2011/2012 – 53,200,250.47 million 2012/2013 – 18,732,581.36 million

3.5.9. The Committee was advised that generally, international best practice recommends that an

incentive program designed to reward performance is a healthy component of an effective

compensation program. As such, it was indicated that the Company is currently in the process of

reviewing the STIP program.


29


3.5.10. On learning of the existence of this incentive programme members of the Committee

expressed concern about the additional financial burden it may have on the Company and also

who sets the performance targets for the programme. The information received clarified both

questions in that we noted that those eligible to benefit would only receive a reward if they

achieved established performance targets and if the Company’s profits exceed a pre-determined

quantity. The fact that these targets are reviewed by Auditors is an essential check and balance

which must not be compromised. As such, we concluded that such a programme may assist with

motivating staff to attain or exceed performance standards which may ultimately translate into

better service delivery to customers.

A. We recommend that the Company review the STIP in the context of its current

financial circumstances and determine whether there should be downward

adjustments in the value of the financial rewards which are distributed to beneficiaries

under the programme.

B. Moreover, we suggest that consideration be given to extending the period for which

the benefits apply from one year to at least two years. This can have the effect of

encouraging employees to sustain high performance over a longer period and shifting

the financial burden from an annual obligation to a two year or three year obligation.

C. To compensate for reductions in the value of the financial incentives, the Company, if

not already in place, must introduce a non-monetary incentive system as a means of

properly recognising outstanding employee performance without increasing

expenditure.

CREDIT RATING

3.6.1. The Committee took note that the Company does not have an official credit rating and is

not associated to international rating agencies mainly because it is not a “listed company”.


30

Nevertheless, it was noted that its Gearing Ratio 10in terms of telecommunication companies is

healthy and stands at 33-36% in relation to the international benchmark of 65%.

HEALTH AND SAFETY POLICY

3.7.1. The Committee was informed that the Company has a safety policy based on three major

principles of business as follows:

1. legal responsibilities;

2. moral obligations; and

3. economic benefits.

3.7.2. The safety policy outlines the declaration of commitment of the executive team for the

procurement of safety, health and environmental management in the operations of the Company.

In addition, the safety policy designates responsibilities to all levels of staff inclusive of contractors.

3.7.3. TSTT has also developed the following policies and procedures to ensure the effective

management and monitoring of the company’s operations and to reduce the incidence of loss:

- Management Safety Responsibilities;

- Safety Policy Statement;

- Environment Policy;

- Training Policy and Training Matrix;

- Footwear Policy;

- Contractor Management Policy;

- PPE Policy;

- Safe Job Procedures for all operations;

- Accident Reporting and Investigation Procedure;

- Disposal of hazardous waste;

- Emergency Evacuation Procedure; and

- Disaster Management Procedure.

10 A term describing a financial ratio that compares some form of owner's equity (or capital) to borrowed funds. Gearing is a measure of financial leverage, demonstrating the degree to which a firm's activities are funded by owner's funds versus creditor's funds. See http://financial-dictionary.thefreedictionary.com/Gearing+ratio

http://financial-dictionary.thefreedictionary.com/Gearing+ratio

http://financial-dictionary.thefreedictionary.com/Gearing+ratio


31

OSHA Compliance

3.7.4. The Company adheres to the OSH Act 2004 and its amendment of 2006. Moreover, the

Company has dedicated a department to safety namely the Safety Section and has instituted an

Occupational Safety and Health Committee (TSTT OSHC) which meets on a monthly basis and

comprises twelve (12) members, six (6) consisting of management officials and six (6) labour

representatives.

Issues with Protective Gear

3.7.5. The Committee was disturbed to learn that the definition of protective gear set out in the

Collective Agreement was a jerseys and pants. However, we were told that an issue regarding

appropriate protective gear particularly for handling electricity or fires was raised, the Company’s

safety team has been in discussion with the CWU to establish the type, provision and use of

protective gear in the mentioned instances.


3.7.6. Based on the written submissions received the Company’s Health and Safety

policies/procedures appeared to be sound. Although, the level of hazard may not be as high as in

the case of other utility providers such as those involved in electricity generation and distribution,

TSTT workers in many instances may be required to interface with electrical cables and other

hazardous items in the execution of their tasks. However, we noted that the information

submitted did not make reference to any fatalities or serious injuries associated with TSTT workers

or contractors in the field. Although, this does not mean that none have occurred.

3.7.7. Also we reflected on the current provisions regarding “protective gear” as articulated in the

collective agreement and questioned whether this was adequate. We strongly believe that this issue

is of primary importance to the safety of employees given the nature of their work and should

therefore be addressed immediately. Notwithstanding, we are mindful that the Company must

first consult with the respective trade unions prior to formulating and applying policies in this

regard.


32

3.7.8. We recommend that matters concerning the safety of workers such as the

redefinition of “protective equipment” in the Collective Agreement be given due

consideration. Furthermore, a thorough assessment of the suitability of existing protective

equipment should be undertaken with a view to ensuring that when workers enter the field

to execute their duties, they are as equipped and secured as best as possible.

STANDARD OF SERVICE DELIVERY TO CUSTOMERS

Current State of Mobile Network

3.8.1. It was indicated that in 2012, the Company underwent a major upgrade to replace the 2G

Nortel Network which was deemed ‘end of life’ with the 4G capable Huawei /Cisco Network

which included the expansion of service coverage areas. This process was referred to as a ‘forklift

change’ of the entire network. During this period, we were informed that the Company experience

an increase in dropped calls and since then has been working assiduously to bring the dropped

call rate down to an acceptable level.

3.8.2. It was submitted that dropped calls averaged about 14,000 per day. The Committee also

noted that the TATT has set its performance standards for dropped calls at 4% in comparison to

international best practice, which is at 2%. We were informed that TSTT’s drop call rate decreased

over the period 2013-2014 and was currently at 2% and therefore meets TATTs standards.

3.8.3. It was indicated that dropped calls arise as a result of a lack of radio coverage, failed

handover, or cell re-selection attempts. It was also indicated that TSTT’s mobile network has a

population coverage of 98.2% and geographic coverage of 95.25% and 55.75% in Trinidad and

Tobago respectively.

Mobile Coverage and Cell Towers

3.8.4. The Committee was informed that cell towers/sites are necessary to boost/expand mobile

coverage and capacity as the customer base grows. It was indicated that where coverage gaps exists

in various communities, cell sites currently are the most feasible avenue of ensuring coverage..

The Company conveyed that since the mobile penetration rate in Trinidad and Tobago was

approximately 143%, it would be fair to suggest that customers have more than one mobile

handset.


33

3.8.5. The Company has experienced challenges in deploying new cell sites as a result of difficulties

in acquiring the necessary approvals from the Town and Country Planning Division. Protests

against the erection of cell towers by residents of the relevant communities have also been a

hindrance for the Company and declared that it was desirous of acquiring the support of the

Committee to gain approval and community support for the continued establishment of the

towers. Besides the erection of new cell sites, alternative methods of enhancing the performance

of the mobile network include the use of microcells and increasing the “power” of existing cell

sites.

3.8.6. TSTT’s sources its cell towers from international manufacturers who adhere to international

standards such as, Telecommunications Industries Association (TIA), American Concrete

Institute (ACI) and American Society of Test Materials (ASTM). The towers are also sited and

constructed by internationally certified local contractors. However, subsequent to the erection of

a cell tower, approvals must be received from TATT and the Town and Country Planning

Division.

The role and impact of the Industry Regulator

3.8.7. TATT occasionally performs Radio Frequency Radiation Tests to evaluate whether telecom

operators are adhering to their strict emission limits (Maximum Possible Exposure). Information

submitted by the Ministry of Science and Technology disclosed that the Authority was in the

process of developing a comprehensive approach to regulating Quality of Service delivered by

service providers such as TSTT and network operators, by adopting a variety of mechanisms to

ensure concessionaires of public telecommunications services meet specific Quality of Service

indicators and standards, to penalties for concessionaires that fail to meet required standards and

ultimately the recommendation of the Authority to the Minister of Science and Technology to

revoke or to withhold renewal of a concession or parts of a concession.

3.8.8. The Ministry also indicated that the Authority has developed the following documents which

are in varying stages of consultation/approval process, in which the Authority will play a more

proactive role in assessing quality of service requirements:

Draft Consumer Rights and Obligations Policy;


34

Draft Network Quality of Service Policy, Indicators and Guidelines;

Draft Network Quality of Service Regulations; and

Draft Customer Quality of Service Regulations.

3.8.9. Further to a submission from the Consumer Affairs Division of the Ministry of Legal

Affairs, which conveyed the general public dissatisfaction with the quality of TSTT’s mobile

network, the Authority undertook Quality of Service (QoS) Joint Network Audits with TSTT over

the period April –June 2013. The audit consisted of a review and analyses of network statistical

data and field test (drive test) data conducted throughout Trinidad and Tobago. It was reported

that the findings of these audits confirmed the customer complaints of a high incidence of failed

connections.

3.8.10. In July 2013, TSTT acknowledged the reported complaints and committed to taking

remedial action to improve the standard of its service primarily through the implementation a

“Golden Cluster Route Approach” to optimize its GSM Network. An analysis of the post audit

KPI data from TSTT demonstrated that there was some improvement in the QoS across the

Company’s mobile network.

3.8.11. Notable was the fact that the Authority’s records indicated that TSTT was the only provider

of Telecommunications services that routinely complies with the submission of consumer

complaints data on a quarterly basis.

Improving Mass Communication Capacity

3.8.12. The Committee was informed that the normal capacity of a cell site does not allow for 20

to 40 times the number of persons accessing the network simultaneously. As such, the Company

monitors and assesses a number of mass events or popular occasions that would place a high

demand on the network and employs short-term to medium-term methods to increase network

capacity on a case by case basis. It was reported that some of these short-term network solutions

have proven successful on a few occasions. The Committee noted the other options available to

address coverage gaps include the use of micro cells or increasing the power at existing cell towers

as opposed to erecting new cell towers.


35

3.8.13. In addition, commencing in 2014, the Company deployed Long-term Evolution

Technology (LTE)11 over the next three (3) years into rural and underserved communities. Pilot

project was introduced in Sangre Chiquito and Golden Lane, Tobago.

Telecommunication Network System Audits

3.8.14. The Committee was advised that an independent audit from a top global technology

equipment manufacturer, Ericson was engaged and tasked with assessing the quality of network,

and benchmarking the Company’s performance against regional and international operators. It is

anticipated that the findings of this report will provide information that will be beneficial in

improving the customer’s experience, filling coverage gaps and performing optimization exercises

to support new value added and data-tech services.


3.8.15. We noted that some technical challenges such as “dropped calls” emanated from the

overhaul or forklift change of its mobile network. However, it appeared that these issues have

persisted even beyond the network overhaul phase. During the public hearing several members

provided personal accounts of poor network coverage or service. As such, the Committee

questioned the statistics on the daily average number of dropped calls submitted by TSTT. As end

users of TSTT’s mobile network, some members of the Committee expressed deep concern about

the quality of service the Company has been providing to the population and was adamant that

the Company must take definitive measures to improve same.

3.8.16. The Company has been working assiduously through a series of optimization exercises and

other strategies to improve its quality of service. We trust that the significant capital investments

the Company intends to undertake would result in improvements in the capacity, reliability and

accessibility of its network. With respect to the Company’s desire to increase its complement of

cell sites/towers, as an oversight Committee, we are not equipped to pronounce on the costs and

benefits of erecting cell towers. As such, we cannot make a definitive pronouncement on what is

appropriate or inappropriate in this regard. However, we encourage the Company to continue to

11 An acronym for Long Term Evolution, LTE is a 4G wireless communications standard developed by the 3rd Generation Partnership Project (3GPP) that's designed to provide up to 10x the speeds of 3G networks for mobile devices such as smartphones, tablets, netbooks, notebooks and wireless hotspots.

http://www.webopedia.com/TERM/4/4G_LTE.html


36

engage the relevant authorities, associated residents and other stakeholders with a view to

acquiring the necessary approvals and dispelling unjustified concerns regarding the erection of cell

towers.

3.8.17. Undoubtedly, the Company’s success and reputation is to some extent dependent on

customer confidence, this in turn depends on the Company’s ability to provide a reliable and

widely accessible service. As such, shortcomings, in this regard has and will continue to have a

detrimental impact on the Company’s growth and expansion. We noted that one of the major

objectives of the Company’s strategic plan is the development of its Mobile Network.

3.8.18. The Company is commended for its efforts to be compliant with the requests and

agreements involving TATT.

A. Given the significance of maintain customer confidence in an industry of this nature,

we recommend that the Company work assiduously towards enhancing the quality of

its mobile network services with a view to eventually reducing its mobile “drop call”

rate.

B. We recommend that the Company engage in a detailed public awareness campaign to

build community support particularly as it pertains to the establishment of cell towers

in areas where there are coverage gaps. Furthermore resources must be allocated to

sensitizing the public about the impact sudden and or exponential increases in the

“load” or customer demand on the mobile network may have on the quality of service

the Company is able to provide. This may assist with managing the expectations of

customers.

C. We recommend that Parliament, through the Ministerial Response to this report, be

informed of the findings of the independent audit that the Company commissioned

Ericson to conduct.

D. We further challenge the Company to consider the use of micro cells as a potential

option for increasing network coverage.


37

CONFIDENTIALITY MATTERS

3.9.1. With regards to accessing customer information, the company reported that the Interception

of Communication Act (IOC) Chapter 15:0812 provides for the accommodation of external

requests from an officer identified by the Commissioner of Police or a High Court Warrant. In

addition, the Committee was informed that the Company is required by its concession, to assist

the Minister of National Security in this regard, if requested.

3.9.2. However, it was indicated that while Call Data Records (CDRs) are accessible by the

Company and provides information on traffic data for voice calls, Short Message Services (SMSs)

and calls routed to voicemail or calls made to the voicemail platform; the content of the voice

calls, SMSs, emails, BlackBerry Messenger (BBMs) and WhatsApp messages are inaccessible.

3.9.3. With regards to security measures to prevent unauthorised access to a customer’s mobile

phone records, the Company indicated that access to all platforms that contain mobile phone

records are protected by user names and passwords. As well, there is an audit mechanism to

record/log any access to customer records. In addition, any request for information in conformity

with the IOC Act, is entertained by concealing the mobile number unless it is required to reveal

the number, then the request must be based on a specific need which is approved by an internal

process.

Procedure for accessing Call Data Records (CDRs)

3.9.4. In brief, the procedure for accessing Call Data Records (CDRs) entails an authorised police

officer serving a notice of the CDR required together with a Warrant/Order on the Head, Legal

at the Company who upon receipt of the notice, Warrant and/or supporting documents, reviews

the matter and ensures its compliance with the IOC Act. Once in compliance with the IOC Act,

the notice is forwarded to the Head, Security who causes the CDRs to be obtained from one of

the two employees who has direct access to retrieve CDRs. Thereafter, the Head, Security submits

the information to the Head, Legal in hard copy with a certificate authenticating the records

obtained. The Head, Legal is responsible for releasing the information requested to the authorised

12 http://rgd.legalaffairs.gov.tt/laws2/alphabetical_list/lawspdfs/15.08.pdf

http://rgd.legalaffairs.gov.tt/laws2/alphabetical_list/lawspdfs/15.08.pdf


38

police officer together with a cover letter by email or any other means, upon obtaining the

signature of the police officer acknowledging receipt of the information. Noteworthy, is that under

no circumstances does TSTT release information relating to CDRs directly to any party other than

an Authorised Officer.

3.9.5. In addition, it was mentioned that searches are conducted by two (2) Research Officers who

previously reported to the Manager, Risk and Network Fraud and currently to the Manager,

Investigations and Intelligence. As well, within the Security Department, only a very limited

number of employees have direct access to 'unmasked' Call Data Records.

3.9.6. We also took note that, there is a security system in place which records the thumbprints of

persons accessing customer information and that security breaches are flagged when evaluations

of the system’s records are performed.


3.9.7. The Committee thought it important to raise the issue of the confidentiality of telephone

records relative to TSTT’s status as a state controlled Company and also given the provisions of

the IOC Act mainly because it was cognisant that members of the public had been speculating

about the Company’s policy regarding the retention and use of “Call Data Records”. As such, we

believe that the clarification provided by the Company regarding how telephone records are handle

may dispel some of the misconceptions held by the public in this regard.

3.9.8. The information submitted on this subject, suggested that the Company had a clearly

established procedure for granting access to telecom records and that those procedures were

supported by certain protocols. We were satisfied that there were sufficient safeguards in place to

ensure that telecom records are secure and that in instances where such records are released it

must be done in accordance with the provisions of the IOC and that a request for the release of

data will only be facilitated if made by a legitimate authority. Given the sensitive nature of this area

of the Company’s operations, we encourage the Company to ensure that the most robust methods

of securing Call Data Records are employed. It would have been useful to confirm whether the

Company had a policy governing the permanent disposal of these type of records and for how

long telecom records are stored in its databases.


39

A. As a consequence, we recommend that the Company review its Security measures,

procedures and protocol in place for safeguarding ‘Call Data Records’, with a view to

ensuring that if opportunities for breaches excess they are eliminated or considerably

minimized. Consideration ought to be given to limiting as far as possible, the number

of parties involved in the data retrieval process.

B. We further recommend that all employees involved in the recording and retrieval of

CDRs be obliged to undergo a psychometric testing on an annual basis and be

subjected to a polygraph testing as a means of enhancing the integrity of the process.

RELATIONSHIP WITH TATT

3.10.1. As a major Company in the telecommunications industry, the Committee was keenly

interested in assessing its relationship with the industry’s regulator, TATT. Information received

from the MoST regarding the Company’s interactions with the Authority was summarised in

paragraphs 3.8.7. to 3.8.11. above. Nonetheless, additional information received from the

Company and TATT suggested that the Company’s relationship with the Authority was

necessitated by the oversight of concessions and licences granted to it as well as the provision of

subscription for broadcasting services.

3.10.2. TATT has oversight of the general regulation of telecommunications and regulation of

broadcasting. The Authority is also a resource management agency in respect of spectrum

numbers. Two (2) instruments are utilized in the fulfillment of its regulatory function;

concessions and licences. Concessions relate to the general conditions and obligations of a

concessionaire, in the provision of public telecommunications and/or broadcasting services, and

also in the provision of telecommunications network. Licences relate to the assignment of

spectrum to stakeholders.

3.10.3. TSTT indicated that it shares a collaborative relationship with its regulator and has

established a regulatory and policy department to specifically liaise with the Authority. TSTT also

indicated that it has been submitting its customer complaints database to TATT on a quarterly


40

basis since 2008 and as a result generally enjoys a positive relationship with the regulator

particularly in relation to the resolution of customer matters.

3.10.4. Notwithstanding, we were informed that the Company has been having some challenges

with its regulator. We inferred that the majority of the concerns point toward a general problem;

that the TATT has adopted the disposition to strictly adhere to its legal framework to the extent

that, any action/process not provided for therein is disregarded. From this issue stem the

following transparency/accountability issues that demonstrate the regulators failure to carry out

its functions:

A. Lack of transparency- it was indicated that there is a lack of transparency in the manner by

which budgets are set which affects the level of concession fees charged to providers on a

yearly basis. Additionally, TSTT recognised that there were significant transfers to the

Consolidated Fund attributed to excess funds incurred possibly as a result of over-budgeting

at the end of several financial years. Furthermore, it was indicated that generally, no

precautions are taken to ensure that unused allocation for a project that was not executed in a

financial year are re-budgeted, perhaps because this is not stipulated in the governing

legislation.

It was indicated that the Company is therefore seeking the amendment of the existing

legislation to provide for greater transparency in the setting of budgets on an annual basis as

well as to implement a review process aimed at addressing the matter of excessive budgeting

and to provide copies of the proposed budgets to providers for comment thereon as is

practiced in Jamaica.

B. Duty to act reasonably - the Company also explained that the TATT has failed in their duty

to act reasonably on the account that certain issues are not stipulated in the governing

legislation for instance, the Authority was beseeched to conduct its own assessment such as

a feasibility study or a cost benefit analysis prior to demanding that telecom providers initiate

expensive alterations to their networks for example indirect access and number portability to

facilitate the Authority’s template approach to regulation. Furthermore, we were informed that

these alterations were proven unnecessary for the development of competition in the Trinidad

and Tobago’s market which although is small, is relatively a mature market. It was also


41

indicated that consequently, telecom providers are not being allowed to conduct a business

but rather are being forced to follow a template for regulation of the sector that is irrelevant

to the local market. TSTT lamented that given their analysis, there will not be significant

returns on investments and such failure is likely to be passed on to the consumer who the

regulator has a duty to protect.

C. Universal Service – the Committee also noted that according to TSTTs knowledge, a fund

established via the current legislation with the contributions of providers stands in excess of

TTD$120 million because, it does not mandate the TATT to utilize the funds. It was indicated

that the fund is entirely under the control of a subcommittee of the TATT and the providers,

its contributors have absolutely no involvement in its utilization.

It was also indicated that to TSTTs knowledge, the funds have not been used for the benefit

of underserved communities and although it was suggested by the providers of the fund that

it be used to finance some projects initiated by the TATT such as Number Portability and

Internet Exchange Point (IXP) infrastructure which are projects of public merit aligned to the

Government of the Republic of Trinidad and Tobago’s objective of increased ICT access and

improved broadband experience for all, TATT did not take the suggestion into consideration

on the account that the use of fund to adapt to the rapidly changing technological environment

and by extension the evolving definition of Universal Services is not provided for in the Act.

3.10.5. It was indicated that for these reasons, TSTT has proposed amendments to the Act to

enable the regulator’s willingness to act reasonably. It was indicated that these amendments were

highlighted at consultations and were communicated to the MPA.


3.10.6. The information received from TSTT convinced the Committee that urgent regulatory

reform of the legislative framework governing the TATT was required. Although it is

commendable that the TATT religiously adheres to the legislation governing it, it can be argued

that it was necessary to amend the relevant law to make it more relevant to prevailing market

conditions and recent development in the telecom sector.


42

3.10.7. With regards to the fund, the Committee unfortunately did not inquire into its purpose and

its use. Nonetheless, arrangements should be instituted to guide the release and or allocation of

funds from the Provider Contributed Fund. The Committee also notes that the TATT falls under

the ambit of the Ministry of Science and Technology and therefore any amendments to its

legislation should fittingly be piloted via this Ministry.

A. Notwithstanding, we strongly believe that it is the core responsibility of the Ministry

of Public Utilities and the Ministry of Science and Technology to collaborate in order

to facilitate consultations with stakeholders regarding how the Telecommunications

Act chapter 47:31 can be improved.

RELATIONSHIP WITH MINISTRY OF PUBLIC UTILITIES AND THE

MINISTRY OF PUBLIC ADMINISTRATION.

Ministry of Public Utilities

3.11.1. With regards to the Company’s relationship with its line Ministry it was indicated that the

MPU holds meetings with its state agencies every two months. These meetings are chaired by the

Permanent Secretary and allows the Company an opportunity to provide updates on issues

affecting it. Additionally, the Company provides an overview on the status of ongoing projects

and initiatives on a monthly basis to its line ministry.

3.11.2. It was also indicated that the Minister of Public Utilities attended and participated in the

planning and discussions concerning the Company’s current five (5) year Strategic Plan and

continues to provide guidance and assistance together with the Corporation Sole and NEL.

The Ministry of Public Administration/Ministry of Science and Technology

3.11.3. The Company indicated that it does not have an active working relationship with the MPA.

On the contrary, we learned that it was the MoST that tangentially affects the strategic direction

of TSTT through the execution of its oversight role in relation to TATT. Thus, the Ministry’s

influence on the Company is only evidenced through the execution of macro policy regarding the

telecom industry.


43


3.11.4. With regards to the Company’s relationship with its line Ministry, we are satisfied that

consultations and dialogue are facilitated via meetings. There appeared to also be an appropriate

reporting mechanism in place given that the Company reports monthly to the MPU. With regards

to the Company’s relationship with the MoST we noted that it was indirect and facilitated by its

oversight of TATT and the execution of national policies regarding the Telecoms sector.

Your Committee respectfully submits this Report for the consideration of the Parliament.

Dr. Victor Wheeler Mr. David Small Chairman Vice-Chairman

Dr. Tim Gopeesingh, MP Mr. Clifton De Coteau, MP Member Member Mr. Kevin Ramnarine Dr. Lincoln Douglas, MP Member Member Ms. Alicia Hospedales, MP Mr. Collin Partap, MP Member Member Mr. Fitzgerald Jeffrey, MP Dr. Lester Henry Member Member Dr. Bhoendradatt Tewarie Mrs. Christine Newallo-Hosein Member Member May 22, 2015


44

APPENDICES


45

APPENDIX I

Entities falling under the purview of

the Committee


46

List of Ministries, Statutory Authorities and State Enterprises that fall under the purview of this

Committee

1. Local Government

STATUTORY BOARDS AND OTHER BODIES:

National Commission for Self-Help Limited

New City Mall

East Side Plaza

WHOLLY OWNED ENTERPRISES:

Trinidad and Tobago Solid Waste Management Company Limited

National Maintenance Training and Security Company Limited (MTS)

2. National Diversity and Social Integration


Archaeological Committee

National Museum and Art Gallery (Royal Victoria Institute)

3. National Security


Defence Force Commissions Board

Defence Council

Firearms Appeal Board

Strategic Services Agency

Youth Training Centre Board of Management

National Operations Centre

4. Office of the Prime Minister


Sport and Culture Board of Management

5. People and Social Development


Social Welfare District Boards

Trinidad and Tobago Association in Aid of the Deaf

Trinidad and Tobago Blind Welfare Association

6. Planning and Sustainable Development


Advisory Town Planning Panel

Caribbean Industrial Research Institute (CARIRI)

Chaguaramas Development Authority

Council for Innovation and Competitiveness

Economic Development Board


47

National Population Council

STATE ENTERPRISES:

East Port-of-Spain Development Company Limited

7. Public Administration

WHOLLY-OWNED ENTERPRISES:

Government Human Resources Services Limited (GHRS)

8. Public Utilities


Regulated Industries Commission (RIC)


The Trinidad and Tobago Electricity Commission (T&TEC)

The Trinidad and Tobago Postal Corporation (TTPOST)

MAJORITY-OWNED ENTERPRISES:

Telecommunications Services of Trinidad and Tobago Limited (TSTT)

9. Science and Technology


National Information, Communication, Technology Company Limited (iGovTT)

National Institute of Higher Education (Research, Science and Technology)

Telecommunications Authority of Trinidad and Tobago (TATT)

10. Sport


National Stadia Board of Management

Regional Complexes

Trinidad and Tobago Boxing Board of Control


Sport Company of Trinidad and Tobago Limited

11. Tertiary Education and Skills Training


Accreditation Council of Trinidad and Tobago (ACTT)

Board of Industrial Training

College of Science, Technology and Applied Arts (COSTATT)

Eastern Caribbean Institute of Agriculture and Forestry (ECIAF)

John S. Donaldson Technical Institute

National Energy Skills Centre (NESC)

National Training Agency


48

San Fernando Technical Institute

Teachers Training Colleges

Trinidad and Tobago Hospitality and Tourism Institute

University of Trinidad and Tobago

University of the West Indies

- Open Campus

MAJORITY-OWNED ENTERPPRISES:

Metal Industries Company Limited (MIC)

- Government Vocational Centre


Youth Training and Employment Partnership Programme Limited (YTEPP)

12. Tobago Development

STATUTORY BOARDS AND OTHER BODIES

Tobago Regional Health Authority

13. Tourism

STATUTORY BOARDS AND OTHER BODIES;

Zoological Society of Trinidad and Tobago


Tourism Development Company Limited

National Academy of the Performing Arts Hotel

14. Trade, Industry, Investments and Communications


Betting Levy Board (BLB)

Trinidad and Tobago Bureau of Standards (TTBS)

Trinidad and Tobago Racing Authority (TTRA)

Weights and Measures

Prices Council

Board of Film Censors


Evolving TecKnologies and Enterprise Development Company Limited (e-Teck)

Export-Import Bank of Trinidad and Tobago Limited (EXIMBANK)

Trinidad and Tobago Free Zones Company Limited (TTFZ)

Caribbean New Media Group Limited (CNMG)

Government Information Services Limited (GISL)

National Broadcasting Network (NBN)



49

Business Development Company (BDC)

Point Lisas Industrial Estate

Trinidad and Tobago Entertainment Company Limited (TTent)

Trinidad and Tobago Film Company

Creative TT Limited

INDIRECTLY-OWNED ENTERPRISES:

Caribbean Leasing Company Limited (CLCL) Subsidiary of BDC

National Flour Mills (NFM)

Premier Quality Services Limited (PQSL) Subsidiary of TTBS

15. Transport


Airports Authority of Trinidad and Tobago

Air Transport Licensing Authority

Pilotage Authority

Port Authority of Trinidad and Tobago

Public Transport Services Corporation (PTSC)

Transport Board


The Vehicle Maintenance Corporation of Trinidad and Tobago Limited


National Helicopter Company Limited

Point Lisas Port Development Corporation Limited (PLIPDECO)

MINORITY-OWNED ENTERPRISES:

LIAT (1974) Limited

16. Works and Infrastructure


National Infrastructure Development Company Limited (NIDCO)

National Maintenance Training and Security Company (MTS)

Community Improvement Services Limited (CISL)

Palo Seco Agricultural Enterprises Limited (PSAEL)

Rural Development Company of Trinidad and Tobago (RuDeCOTT)


50

APPENDIX II MINUTES OF PROCEEDINGS


51

PRESENT

Committee Members Dr. Victor Wheeler Chairman Mr. David Small Vice-Chairman Ms. Alicia Hospedales, MP Member Mr. Fitzgerald Jeffrey, MP Member Dr. Lincoln Douglas, MP Member

Mr. Collin Partap, MP Member Dr. Tim Gopeesingh, MP Member Mr. Kevin Ramnarine Member Dr. Lester Henry Member

Secretariat

Mr. Julien Ogilvie Secretary Ms. Candice Skerrette Assistant Secretary Ms. Katharina Gokool Graduate Research Assistant

ABSENT

Dr. Bhoendradatt Tewarie Member (excused) Mrs. Raziah Ahmed Member (excused) Mr. Clifton De Coteau, MP Member (excused)

REPRESENTATIVES OF THE MINISTRY OF PUBLIC UTILITIES Mrs. Jacinta Bailey-Sobers Permanent Secretary Mr. Victor Jones Deputy Permanent Secretary Ms. Anika Farmer Director, Legal Services

REPRESENTATIVES OF THE TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO

Mr. Rakesh Goswami EVP, Government and Enterprise

Services/ Ag. CEO Mr. Charles Carter EVP, Legal, Regulatory/

Corporate Secretary Mr. Gerard Cooper EVP, Finance/Chief Financial

Officer

MINUTES OF THE THIRTY-SECOND MEETING OF THE JOINT SELECT COMMITTEE OF

PARLIAMENT APPOINTED TO INQUIRE INTO AND REPORT ON GOVERNMENT

MINISTRIES (GROUP 2), STATUTORY AUTHORITIES AND STATE ENTERPRISES FALLING

UNDER THOSE MINISTRIES, HELD IN THE ARNOLD THOMASOS ROOM (EAST), LEVEL 6 AND

THE J. HAMILTON MAURICE ROOM OFFICE OF THE PARLIAMENT, TOWER D, PORT OF SPAIN

INTERNATIONAL WATERFRONT CENTRE, #1A WRIGHTSON ROAD, PORT OF SPAIN ON

FRIDAY MAY 09, 2014 AT 9:33 A.M.


52

Mr. Harigobin Jhinkoo EVP, Human Resources Mr. Trevor Deane EVP, Strategic Analytics, Corporate

Research and Carrier Services Mr. Ronald Walcott EVP, Mobile Services and

Operations

REPRESENTATIVES OF TELECOMMUNICATIONS AUTHORITY

OF TRINIDAD AND TOBAGO

Mr. Cris Seecheran Chief Executive Officer Ms. Nievia Ramsundar Corporate Secretary/Executive

Officer, Legal and Regulatory Affairs INTRODUCTION 1.1 The Chairman called the meeting to order at 9:33 a.m.

[Members exited the Arnold Thomasos Room (East) and proceeded to the J. Hamilton Maurice Room]

PRIVATE HEARING WITH OFFICIALS OF THE TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO 6.1 The Chairman reconvened the meeting in camera in the J. Hamilton Maurice Room at 10:00 a.m. 6.2 The Chairman welcomed officials from TSTT and after conferring, the Committee was asked not to discuss the following areas during the public hearing:

the strategic direction of the Company;

the impact of the opening of the telecommunication market on the Company’s

revenue, market share, staff flight/turnover and telecommunications infrastructure;

details of the number of customers serviced by the Company (fixed line, internet, mobile, surveillance etc.);

changes in the number of customers subscribing to the Company’s services; and

the shareholders’ agreement between TSTT and the Cable & Wireless Company.

[TSTT Officials exited the J. Hamilton Maurice Room]

6.3 The Committee discussed and agreed to the areas identified by TSTT. However, with respect to the “Strategic Direction of the Company” the Committee agreed that during the public meeting, it may request that TSTT speak broadly about its strategic plans for the next five years without specific details.

[TSTT Officials re-entered the J. Hamilton Maurice Room] 6.4 TSTT officials were advised of the Committee’s decision and that it was agreed that broad areas of the Company’s Strategic Direction could be raised during the public hearing if necessary. 6.5 The Chairman advised that written communication would follow regarding a private session and/or a public session, if necessary.


53

6.6 Brief discussions ensued with officials on the procedure and protocols to be observed during the meeting. PUBLIC HEARING WITH OFFICIALS OF THE TELECOMMUNICATIONS SERVICES OF TRINIDAD AND TOBAGO 7.1 The Chairman reconvened the public meeting in the J. Hamilton Maurice Room at 10:20 a.m. 7.2 The Chairman welcomed officials from TSTT, the Ministry of Public Utilities (MPU) and the Telecommunications Authority of Trinidad and Tobago (TATT). Introductions were exchanged. 7.3 The Chairman conveyed the Committee’s displeasure regarding its late receipt of the Company’s pre-hearing submissions and the difficultly experienced by members to effectively scrutinize the submission. The Chairman indicated the Committee may need to convene another meeting with TSTT. The Company offered apologies for its late submission. 7.4 Detailed below are the issues raised and the responses which emanated from the discussions with the various representatives:

i. Opening Statements a. Permanent Secretary, Ministry of Public Utilities

TSTT falls under the MPU’s schedule of responsibilities. The Ministry receives performance reports from TSTT and this information is included in the Ministry’s annual statistical digest of achievements.

b. Chief Executive Officer (Ag.), TSTT

Since 1991 the Company has remained profitable with the exception of one year when significant changes were made to its mobile network. Therefore, the Company’s initial shareholder equity has increased from $537 million to $3.2 billion as at December 31, 2013.

In the past five years, the Company has aggressively invested approximately $4 billion in capital expenditure towards the upgrade and expansion of its network infrastructure.

In the past eight years, the opening of the mobile telecommunications market has been a catalyst for TSTT to expand its product portfolio from a telephone line business to the country’s only quintuple service provider with services including voice, high speed broadband, television, security and mobile services. During this period, the Company also diversified its technology mix from copper-based, digital infrastructure to wireless, fibre optic internet protocol-based core infrastructure. These changes have favorably impacted on TSTT’s operations through a broadened customer base and stable annual revenues. The Company has also achieved a reduction in expenditure associated with cable theft from approximately $25 million to less than $1 million annually.

The Company is the most advanced provider of integrated communication solutions in Trinidad and Tobago and serves customer categories such as government ministries, conglomerates, microenterprises and individuals.


54

In August 2013, a strategic plan was approved by the Company’s Board of Directors. This plan provides details on strategies to achieve targeted growth in mobile, broadband and enterprise sectors. Examples of the areas of implementation within its strategic plan include the introduction of the country’s first gigabit community and the deployment of Long-term Evolution Technology (LTE) over the next three years into rural and underserved communities.

The Company’s vision is focused on growth, return on capital investment and realignment to better serve customers. The acting CEO acknowledged that areas for improvement included cost management, transformation of the customer service experience and delivering greater value for money to its customers.

The acting CEO indicated that pre-hearing submissions of the Company were carefully crafted to ensure the preservation of the interests of its shareholders. Hence, in complying with the Committee’s request for information, the Company sought to balance its obligation to preserve the confidentiality of sensitive commercial information which if disclosed could be detrimental to its best commercial interests, with the need to be completely transparent for the purpose of the inquiry.

c. Chief Executive Officer, TATT

TATT was established under the Telecommunications Act, 2001. Although the Authority’s board was established in 2001, TATT became an operational entity in July 2004 following the proclamation of the 2001 Act and the enactment of the Telecommunications (Amendment) Act, 2004.

In 2004, TATT’s primary mandate was the opening of the telecommunications sector and thereafter the facilitation of the orderly development of both the telecommunications and broadcasting sectors in Trinidad and Tobago. TATT also has responsibility to protect the interests of consumers, promote universal telecommunication services and encourage investment in telecommunications and broadcasting systems.

TATT has oversight of the general regulation of telecommunications and regulation of broadcasting. The Authority is also a resource management agency in respect of spectrum numbers.

Two (2) instruments are utilized in the fulfillment of its regulatory function; concessions and licences. Concessions relate to the general conditions and obligations of a concessionaire, in the provision of public telecommunications and/or broadcasting services, and also in the provision of telecommunications network. Licences relate to the assignment of spectrum to stakeholders.

TATT’s relationship with TSTT is in relation to the oversight of the concessions granted to TSTT, the provision of telecommunication services, the provision of telecommunication networks and the provision of subscription broadcasting services. TATT provides oversight of the general obligations of TSTT under the licences granted by the Authority.

ii. Strategic Direction


55

a. In the past five years there has been a decline in the Company’s gross profit and net profit margins. However, the Company has maintained a steady revenue base of approximately $3 billion through the introduction of new lines of business. In particular, its security services and IPTV services have helped maintain the Company’s revenues.

b. The focus of its five year Strategic Plan (2013/2018) is to address areas to ensure that the

Company remains a profitable entity, provides returns to its shareholders and is a more customer centric organization. The Company will focus its investments in three main areas of service: “wireless”, “broadband” and “enterprise and government services”. The Company also intends to pursue a greater level of “automation” of front office and back office processes so that customers can log into the Company’s web portal to access services online.

c. The Company also intends to undertake infrastructural projects such as the expansion of its wireless landscape, the provision of more wireless modes of technology, the expansion of its footprint and the improvement of its broadband penetration.

d. Another area of focus is “organizational transformation” as its employee cost base in not in alignment with international benchmarks. The reduction in personnel costs is currently being facilitated by an ongoing Voluntary Separation of Employment Programme (VSEP).

iii. Business Lines – Growth and Maturity Stages The Company’s traditional fixed lines business is at maturity stage and is being substituted by mobile handsets. Growth is being experienced in broadband technology, CCTV services and home alarm monitoring.

iv. Managing Employee Costs a. The Committee was informed that the Company is challenged by its personnel costs which

are high in comparison to industry benchmarks. In addition to the VSEP, the Company intends to pursue a competency-based framework to harness its human capital strategically as well as to reorganize its operations to allow it to be more customer-centric and respond to internal challenges.

b. The Company confirmed that its increasing cost structure (related to high employee costs) has

eroded its profit margins and this issue has been addressed in its strategic plan.

v. Employee Statistics a. As at April 30, 2014, the Company had 2,537 permanent employees.

b. During 2009 to 2013, the average staff turnover was 2.7% and no employees were retrenched from the Company.

vi. Industrial Relations The Company has 202 matters pending before the Industrial Court as at April 01, 2013. However, 120 of these matters relate to a single event (i.e.worker misconduct due to participation in an illegal industrial action).

vii. The Company’s classification a. The Committee was informed that TSTT is a private limited liability Company registered

under the Company Act, Chap. 81:01, whose shares are held by National Enterprises Limited (NEL) and Cable and Wireless.


56

b. However, the Company may still be regarded as a state enterprise depending of the wording of the related legislation. For example, Section 66A(1)(b)(i) of the Constitution states, “an enterprise shall be taken to be controlled by the State if the Government or any Body controlled by the Government – exercises or is entitled to exercise control directly or indirectly over the affairs of the enterprise.” The Company falls within the area of indirect control and ownership by the government, since the majority of TSTT’s shares is held by NEL, which in turn is wholly owned by the state.

c. The Company submitted that legislation such as the Freedom of Information Act, Chap. 22:02 and the Integrity in Public Life Act Chap. 22:01 includes definitions of “state enterprise” which are narrower in scope than what is provided in the Constitution. This matter was pronounced upon in a Court of Appeal judgment which determined that the Company is not a state enterprise and its directors were not required to file declarations in accordance with the Integrity in Public Life Act.

viii. Mobile Network Challenges

a. The Committee was informed that since its Nortel network was deemed to be end of life in 2011, a forklift change of the entire network was done in 2012. Although efforts were made during this change over to ensure the quality of the Company’s service was maintained, subsequent to the forklift change, there were higher than normal quality of service challenges inclusive of dropped calls.

b. The Company has been working assiduously through a series of optimization exercises and

other strategies to improve its quality of service. Its drop call rate is approximately 2%, the TATT dropped call rate standard for telecom providers is 4% and the international best practice standards is 2%.

c. The Committee was informed that a dropped call is defined as a call that was terminated before the call was supposed to. Therefore, the drop call rate is measured either on the switch or through call data records and abnormal terminations of calls.

d. There are shortcomings in the Company’s mobile network in three areas; quality of service, coverage and capacity. Capacity challenges are related to the growth in its data and mobile broadband.

e. The Committee was informed that one year ago, the Company had a campaign where it apologized to customers. During this campaign, the Company had expressed its commitment towards better service delivery. Further, in accordance with its strategic plan, investments will be directed to the area of mobile and broadband services as a means of improving the quality of its service.

ix. Telecommunication Network System Audits The Committee was informed that the Company performs Optimization Drive Tests on a daily basis and it also monitors the network daily and conducts regular network audits. The Company has provided TATT with two reports on dropped calls along with strategies to alleviate quality of service challenges such as golden routes and golden clusters.


57

x. New Cell Sites and other options for improving the Company’s Mobile Coverage a. The Company conveyed that since the mobile penetration rate in Trinidad and Tobago was

approximately 143%, customers have more than one mobile handset. There are coverage gaps that can only be only be fixed by the deployment of new cell sites. The Company has experienced challenges in deploying new cell sites as a result of difficulties in acquiring the necessary approvals from the Town and Country Planning Division. Protests against the erection of cell towers by residents of the relevant communities are also a hindrance for the Company.

b. The Committee was informed that besides the erection of new cell sites, alternative methods

of enhancing the performance of the mobile network include the use of microcells and increasing the “power” of existing cell sites.

xi. Veto Power of Cable & Wireless

The Committee was informed that the joint venture arrangement between Cable & Wireless and TSTT is governed fully and mandatorily by a shareholder agreement signed at the Company’s inception in 1991. This agreement provides that Cable & Wireless has veto power in respect of capital expenditure.

xii. Product Promotions and Customer Service a. The Committee was informed that handset promotions are governed by the number of

devices placed in the public domain. The Company indicated that the price of a particular device may result in a high level of demand for that device, which in turn would accelerate the depletion of stock.

b. Product Promotions are governed by a pre-determined strategy about what the Company is

prepared to spend and desires to achieve. The Company’s expenditure on advertising and promotion is not responsible for the reduction in the Company’s profits, since expenditure in this area has been decreased over the last three to four years.

xiii. Technology Ranking

a. The Committee was informed that the Company is a “fast follower” if ranked against other companies with cutting edge technology.

b. In 2013, the Company rolled out a 4G network which was HSPA+13 in the mobile market

and in 2014 a Long Term Evolution (LTE) pilot project was introduced in Sangre Chiquito and Golden Lane, Tobago.

c. The Company indicated that some of the shortcomings associated with its mobile network are related to the level of coverage as opposed to the quality of its technology.

xiv. Establishment of Internet Exchange Point (IXP) in Trinidad and Tobago

a. The Company has been collaborating with TATT and other service providers to set-up a local IXP.

b. The Authority became involved to facilitate the implementation of an IXP two years ago.

TATT brought all providers together and it was suggested that a Company be established amongst the various providers. The Board of Directors of this Company (The Trinidad and Tobago Internet Exchange Company) has already convened meetings.

13 HSPA+ is an enhanced version of high-speed 3G wireless networks.


58

c. With respect to progress achieved thus far, the required equipment has been procured and

a suitable location has been identified. The “switch” (server) was installed. At the time of the meeting in question, one provider had established connectivity with the “switch” and the other provider was expected to establish connectivity by June 2014.

d. Four wireless IXPs are yet to be connected due to challenges with acquiring a suitable location compounded with the need to construct a tower.

xv. Fixed Wireless Internet Broadband

The Committee was informed that the development of fixed wireless internet broadband is one of the main infrastructure developments within the Company’s strategic plan. At present, there are four macro sites in trial and the Company envisages that by the end of 2014 there would be significant increases in the amount of fixed wireless internet services available to areas without wired internet.

xvi. Consumer Complaints Reports

a. The Company advised that statistics regarding consumer complaints that were quoted in the submission from the Ministry of Science and Technology submission may have been sourced from the Authority. These figures would tend to vary from the records of TSTT since there are complaints that are resolved by TSTT without the intervention of TATT.

xvii. Funding for Capital Investment Programme

a. The Committee was informed that short-term funding from other financial institutions and vendor financing was utilized to finance its $4 billion capital investment programme. The funding for capex is either by equity debt or internal financing on the balance sheet.

b. In 2005, the Company participated in a bond arrangement with Citibank and this bond is

in its penultimate year of being repaid.

xviii. Credit Rating The Company is not subjected to an official credit rating by an international rating agency primarily because the Company is not a listed Company. The Company’s Gearing Ratio is approximately 33-36%, which is significantly healthy compared to the 65% international telecommunications benchmark.

xix. Trade and other Payables The Company clarified that the $450 million in trade and payables stated in its financial statements for the financial year ended March 31 2013, represents short term loans as well as accruals for ongoing operations, such as advertising and other expenses due to be paid at the end of the financial year.

xx. The status of negotiations with Bargaining Units a. The Committee was informed that there are three Trade Unions representing different

categories of workers in the Company. These include the Estate Police Association, the Executive Secretaries Association and the Communication Workers’ Union (CWU). The CWU represents approximately 75% of its 2,537 employees.

b. At present, the Company is engaged in negotiations with CWU for two (2) periods; 2008-

2010 and 2011-2013. With respect to the CWU’s 2011 to 2013 period, proposals have


59

been exchanged between the Company and the Union. However, the negotiations for the period 2008-2010 are before the Industrial Court.

c. The Company recently finalized negotiations with the Estate Police Association for

2012/2015 and the 2013/2016 agreement with the Executive Secretaries Association was completed in 2013. Therefore, the Company’s negotiations are current with all Bargaining Units with the exception of the CWU.

xxi. Confidentiality of information regarding Industry Revenue ascribed to Mobile Services

a. TATT’s last market report was for the year ended December 2012 and provided aggregate figures on the total revenue earned in particular sectors, as opposed to details of revenue gained by individual companies. The nature of the information published by TATT is determined in collaboration with individual companies operating in the telecommunication industry since certain commercial interests have to be taken into consideration.

b. The Authority quoted from Clauses A-29 and 830 of the Concession document. Section

A-29 which outlines the responsibility of the Authority to prevent the disclosure of confidential information received from operators. Whereas Clause 830 stipulates that in accordance with Section 80 of the Telecommunications Act, the Authority had the right to disclose information on certain grounds.

xxii. Cable Theft

a. The incidents of cable cuts have been reduced from 413 to 12 during the period 2005 to 2013. This has been due to the installation of alarms on significant cables and the deployment of roving patrols by precepted officers.

b. The Committee was informed that the cost associated with the restoration of lines as a

result of cable theft has decreased from $25 million (five years ago) to $12 million as at 2013.

xxiii. Ministerial Oversight of the Company a. The line Ministry for the Company is the Ministry of Public Utilities. The government

controls 51% of the Company’s shares through its ownership of NEL, which is under the purview the Ministry of Finance and the Economy (MoFE) (Corporation Sole).

b. The Committee was informed that there is a rule that if a state enterprise was desirous of borrowing funds, there is an explicit requirement that the enterprise must be issued with a “No-objection Certificate” by the MoFE in order to proceed.

xxiv. Composition and functioning of the Board

The Company’s management makes recommendations to the Board with respect to finances. The composition of the board includes five members appointed by NEL (inclusive of the Chairman) and four members appointed by Cable and Wireless. Shareholder discussions also occur between the MoFE and Cable & Wireless.

xxv. The status of shares held by Cable & Wireless

The Committee was informed that Cable & Wireless has not divested any of the shares in TSTT.


60

xxvi. Mass events, disasters and network capacity a. The Committee was informed that a network is “spec” based on many parameters such

as mobility. Therefore, the normal capacity of a cell site does not allow for 20 to 40 times the number of persons on the network. The Company has been monitoring events with a large number of attendees and has successfully established short to medium term methods to increase capacity at events. However, this is done on a case by case basis.

b. The Company submitted that it has a robust disaster preparedness plan and has formed

an alliance with the Office of Disaster Preparedness and Management. An example of its alliance with the ODPM is the Company’s dissemination of mass text messages to the public as a means of providing disaster warnings.

xxvii. Media reports on the late payment of Salaries by the Company

The Company clarified that there was an instance when salaries were deposited in the bank accounts of its employees at 2:00 p.m. rather than 8:00 a.m. due to a connectivity glitch between the Company and its bankers. On the day in question, an advisory was disseminated informing staff that due to technical difficulties, salaries would be available later in the day.

xxviii. Mobile and Fixed Line Issues in Tobago

a. The Committee was informed that there are specific initiatives within its strategic plan that concerns Tobago. For example, the LTE was jointly launched in Golden Lane (Tobago). The Company also intends to introduce fibre broadband and mobile access as well as to expand its mobile services on the island.

b. The Company confirmed that in August/September 2012, a submarine fibre-optic cable

was installed between Trinidad and Tobago. This has dramatically increased the amount of data that can travel between Trinidad and Tobago.

xxix. The assignment of spectrum to mobile providers

a. TATT clarified that the spectrum assigned to mobile services providers is largely equal. b. The Committee was also informed that when the market was opened in 2005, there was

an imbalance of spectrum assignment in favour of TSTT. However this disequilibrium has since been rationalized.

c. TSTT has a 2x7.5 megahertz block and Digicel has a slightly less but similar megahertz block. Both Digicel and TSTT have a 1900 megahertz band.

d. In addition, the Authority has plans to offer a 700 megahertz band in the future.

xxx. Procurement Procedures a. The Committee was informed that the Company has documented tendering and

purchasing policies and procedures which were approved by the Board. The procurement process utilized for the purchase of goods and services depends on the value of the good/service to be purchased.

b. The full tendering method can be either by public tender or prequalification procedure.

The prequalification procedure entails members of the public being invited to prequalify to supply goods and services every three years. After the prequalified list of vendors/suppliers is established, the parties are invited to bid for the supply of goods and services.


61

c. The Chief Executive Officer has the authority to authorize the purchase of goods and services up to US$1 million. Purchases in excess of US$1 million require the approval of the Tenders Committee which comprises selected members of the Board. However, purchases approved by the Tenders Committee which exceed $20 million are required to be ratified by the entire board.

REQUESTED INFORMATION 8.1 TSTT was asked to furnish the Committee with the following information:

i. The Company’s Strategic Plan for 2013/2018; ii. Confirmation of the margin of error for the dropped call rate vis-à-vis the Company’s mobile

service; iii. With respect to the Statement of Comprehensive Income which states personnel costs of

$638,084,000 in 2010, $689,352,000 in 2011, $654,010,000 in 2012 and $702,478,000 in 2013, the reasons, other than the implementation of the court award for the collective agreement, that can be attributed to the decline in the Company’s profits from 2010 to 2013;

iv. A statement on the percentage of total revenue generated by mobile services; and v. A statement on the market share percentage lost or gain in relation to competitors in the area of

mobile services.

ADJOURNMENT

9.1 The Committee concluded its meeting at 12:40 p.m. and adjourned to Friday June 13, 2014 at 9:00 a.m.

I certify that these Minutes are true and correct.

CHAIRMAN

SECRETARY

June 06, 2014


62

APPENDIX III NOTES OF EVIDENCE


63

PRESENT

Mr. Victor Wheeler Chairman

Mr. David Small Vice-Chairman

Dr. Lincoln Douglas Member

Mr. Fitzgerald Jeffrey Member

Miss Alicia Hospedales Member

Mr. Collin Partap Member

Dr. Lester Henry Member

Mr. Kevin Ramnarine Member

Mr. Julien Ogilvie Secretary

Miss Katharina Gokool Research Assistant

ABSENT

Dr. Bhoendradatt Tewarie Member [Excused]

Dr. Tim Gopeesingh Member

Mrs. Raziah Ahmed Member [Excused]

Mr. Clifton De Coteau Member [Excused]

VERBATIM NOTES OF THE THIRTY-SECOND MEETING OF THE JOINT SELECT COMMITTEE OF

PARLIAMENT APPOINTED TO REPORT ON MINISTRIES, STATUTORY AUTHORITIES AND STATE

ENTERPRISES (GROUP 2) HELD IN THE ARNOLD THOMASOS ROOM (EAST), SIXTH FLOOR (IN

CAMERA), AND AT THE J. HAMILTON MAURICE ROOM (MEZZANINE FLOOR), (IN PUBLIC)

TOWER D, THE PORT OF SPAIN INTERNATIONAL WATERFRONT CENTRE, 1A WRIGHTSON

ROAD, PORT OF SPAIN, ON FRIDAY, MAY 09, 2014 AT 9.33 A.M.


10.00 a.m.: Meeting resumed.

Mr. Chairman: Good morning, welcome representatives of TSTT. I am Dr. Victor Wheeler, Chairman of

the committee. What we would have indicated to you is that we will have a brief in camera discussion for

you to identify the areas that you do not want to be probed and discussed in the public hearing, further to

the correspondence that we received from you.

I just want to take about five minutes on this, and subsequent to you presenting your information,

we would want to have a private discussion among ourselves, and then we will invite you back in to determine

how we will proceed with the rest of the hearing.

In your correspondence of April 29, you did indicate two examples of these relate to questions posed

under heading No. 2, “Strategic Direction of the Company”, heading No. 5, “Impact of opening the

telecommunication Market to all service providers”. I do not know if Mr. Goswami, you would like to

indicate on behalf of TSTT the areas that you would not want discussed at the public hearing.

Mr. Goswami: Morning Chairman, thank you for the opportunity. May I just take one minute to just

confer?

Mr. Chairman: Sure.

Mr. Goswami: Chairman, if I may, you were absolutely correct, Sir, in pointing out that we had in our

original letter pointed out two of the areas, which is the strategic direction of the company, question two. In

terms of the detailed strategic plan, we do not want to talk about the details of the strategic plan, because we

are in a very competitive environment and this is, from our understanding, an open and public hearing. So

if we were to start talking about customer details and revenue projections, we have a request then, if we do

not talk about that, please.

We are okay with all the other questions. We go straight on to question No. 5(1), which is: What

has been the impact on the company as a result of the opening of the telecommunication industry to other

service providers?

Mr. Chairman: You are referring to the submissions that you have made?

Mr. Goswami: I am referring to the questions here, Sir. Question No. 2 and then question 5(1).

[Minister of Energy and Energy Industries enter committee room]

Mr. Goswami: They are in the order that you would have sent them to us, Sir. Then question No. 8(1)

which is once again asking for details of the number of customers as for each individual line of business. So

where you are asking us details: how many in the fixed line, how many in the mobile, how many in

surveillance, et cetera, we do not have a problem divulging that information, but we prefer to do it in camera.

Also 8(2), if there have been changes in the number of customers subscribing, again that we would deem to

be competitive knowledge, and lastly question No. 10, which is the agreement between TSTT and Cable &


65

Wireless. We believe we are in a managerial position and we are answering from a managerial and operational

position. That is very much a matter for shareholders, and that is it, Sir.

Mr. Chairman: Could you just go over them so that we will be clear.

Mr. Goswami: Question No. 2, which is the strategic direction of the company, i.e., a forward-looking

statement; question 5(1), question No. 8(1) and (2), which is details of the number of customers and changes

in the number of customers subscribing to the company services, and then question No. 10, and that is it.

Mr. Chairman: Any members have any queries on what they have mentioned so far? If not we will just ask

them to step outside while we confer.

Mr. Goswami: Thank you, Sir.

[Entity exits committee room]

Mr. Small: Mr. Chair, I have noted the concerns of the company and I have no objection regarding, I think,

5(1), or the one at 8. My concern is two, with strategic direction of the company. I think that while I

understand the company’s concerns about getting into the details of their strategic plans—

Mr. Chairman: In public.

Mr. Small: —in public, I think it is important for the public to also understand in which direction the

company is going strategically. I think to some extent they could speak broadly to what the company intends

to do, without damaging their competitive status. That is my opinion. I think that TSTT is a significant

organization in the country, and I do not think they could not come and say what broadly their plans are. I

do not think that that should be just something to be held in secret because they are in a competitive

environment. We are not asking them for to go into the specific details, but I think they could speak broadly

about what the company wants to do.

Mr. Ramnarine: I support Mr. Small 100 per cent on that. I arrived late. What is their objection to answering

that question giving details and strategic direction? What is their objection to that?

Mr. Chairman: They did not specify. We could ask them to clarify when they come back in.

Dr. Douglas: They said they are in a competitive environment and that would be like giving away the

company’s strategy.

Mr. Ramnarine: I am sure they could speak broadly, because we would like to know where they see

themselves in five years.

Miss Hospedales: Yes, Mr. Chair, I would want to agree with both Mr. Small and Mr. Ramnarine, because

of the fact that we as a committee as well need to understand where their strategic thinking is, and in general.

As Mr. Small said, we are not asking for in-depth details, but if they could give us like a broad overview of

where they see themselves in the next five years as a company.

Mr. Small: In the in camera session I would select to understand the details so that we could process all of


66

the information, but I understand their public concerns, fine, but I think they can certainly speak broadly to

where they see the company going or to the broad initiative the company is seeking. They do not need to

give timelines, but at lease speak broadly and that information could be shared with the public.

Certainly for me, I would like to make sure we get a copy of the plan, because that has been the

precedence of the committee, that organizations coming before the committee provide the committee with

a plan so the committee could be properly informed when we are asking questions, and we are properly

understanding where the company is going, because that is part of the mandate of this organization. I do not

think that they should not be requested to provide a plan to the committee eventually, when it is complete.

Mr. Chairman: I certainly got from him that they do not object presenting all the information to us, it is

just limiting certain information to the public.

Miss Hospedales: Mr. Chair, with respect to the other areas, I would suggest that we can possibly have a

meeting with them, not in camera, but really to ask them to provide information on the areas that we have

questioned them on.

Mr. Chairman: Should we decide on when they come back or should we do this at the end of the session

when we meet to discuss everything?

Miss Hospedales: At the end.

Mr. Chairman: I think after the hearing, we could communicate with them.

Mr. Ramnarine: Could we just go through the questions we cannot ask.

Mr. Chairman: 5(a), 8(a) and (b) and question 10.

Mr. Ramnarine: All of question 5 we cannot ask?

Mr. Chairman: Just 5(a) or 5(1).

Mr. Ramnarine: And No. 10?

Mr. Chairman: The whole of 10. In the public meeting.

Mr. Partap: They will answer it in committee.

Mr. Chairman: We could ask them anything in private, but just not in public. Could we call them in.

Dr. Douglas: Probably we can call them in and deal with the—

Mr. Chairman: We will call them in alone first, and just reinforce that we would want some broad—

Dr. Douglas: I was thinking we could ask them to deal with the ones that they—

Mr. Chairman: The No. 2 with the strategic plan, we will ask them to just broad terms and not specifics.

Dr. Douglas: We could deal with it in detail right here before the public comes in.

Mr. Chairman: No we do not want to delay the public one. I prefer we deal with it after.

Dr. Douglas: All right; yes.

10.15 a.m.


67

Mr. Chairman: All right. Thank you. Okay. We have just deliberated and with respect to question two, the

strategic direction for the company, I am sure you can at least give broad directions without being specific.

Mr. Goswami: Yes, we can, Sir, and in fact, it is in the book; it is in the booklet.

Mr. Chairman: Right. Good.

Mr. Goswami: We have no objection to that.

Mr. Chairman: And other than that, the committee is satisfied to leave out those areas that you have

mentioned for the public hearing, and after the meeting we will communicate with you regarding a private

session when we will ask you to a private session and potentially a public session depending on how the

proceedings go today.

Mr. Goswami: Okay, Chairman.

Mr. Chairman: Right. Any other clarity anyone has before we invite everyone else to start the public

session?

Mr. Goswami: Yes. Chairman, this is our first experience of an august committee like this. Could you

kindly let us know what is the protocol, and what is the procedure this morning?

Mr. Chairman: Well, what is going to happen, I will ask you to introduce yourself and the team will

introduce themselves; we will introduce ourselves.

Mr. Goswami: Yes.

Mr. Chairman: We will want you to press the button to speak, when you are ready to speak, and I will direct

which member is to ask the questions and you will respond, through the Chair to the questions that are asked.

And it is important that each time you speak to put on your microphone. Right. Now, further to that, if in

the course of the discussion you are asked about information that you are not comfortable stating in the

public, then you could then just ask us to write to you for clarity so that you can provide that information in

writing.

Mr. Goswami: Thank you for that, Chairman. Just one other thing; I do have an opening statement which

just sought of sets the tone—

Mr. Chairman: That is right.

Mr. Goswami: If I may be permitted to read that.

Mr. Chairman: And that would be allowed. Yes.

Mr. Goswami: It would probably be about five or six minutes.

Mr. Chairman: Yeah. We will ask you, as well as officials from the Ministry and the Telecommunications

Authority of Trinidad and Tobago, to also give a brief introductory statement. Okay.

Mr. Goswami: And Chairman, one last question is, how do we address the various members because, for

example, Mr. Kevin Ramnarine is written as a member although we are aware that he is a Minister?


68

Mr. Chairman: Just member; member.

Mr. Goswami: Just a member. Thank you, Chair.

Mr. Chairman: Just to let you know, as it is the first time, the aim of the committee is to assist you in what

you are doing because at the end of the session we will be preparing a report which will include

recommendations. So the purpose of appearing before us is really to see how we can assist you in your

operations. And in addition, of course we will be scrutinizing your operations in the process, but the ultimate

aim is to produce a report that will assist you.

Mr. Goswami: Thank you.

[Other entities enter the room]

Mr. Chairman: All right. Good morning, ladies and gentlemen. Welcome to the 32nd meeting of the Joint

Select Committee of Parliament appointed to report on the Ministries, Statutory Authorities and State

Enterprises, (Group 2). Today we have discussions with officials from the Telecommunications Services of

Trinidad and Tobago. And I would like to welcome officials from the Ministry of Public Utilities, as well as

the Telecommunications Authority of Trinidad and Tobago. First of all I would like to invite members of

the Ministry of Public Utilities to introduce yourselves.

[Introductions made]

MINISTRY OF PUBLIC UTILITIES

Mr. Victor Jones Deputy Permanent Secretary

Mrs. Jacinta Bailey-Sobers Permanent Secretary

Mr. Chairman: Next TSTT representatives just to introduce yourselves.

[Introductions made]

TELECOMMUNICATIONS SERVICES


Rakesh Goswami EVP Government and Enterprise

Services/Ag. CEO

Mr. Gerard Cooper EVP Finance/Chief Financial Officer

Mr. Charles Carter EVP Legal, Regulatory, Corporate

Secretary

Mr. Ronald Walcott EVP Mobile Services and Operations

Mr. Chairman: I would also like to invite members of the Telecommunications Authority of Trinidad and

Tobago.

Mr. Goswami: We have two more members.

Mr. Chairman: Sorry. Continue.


69

Mr. Trevor Deane EVP Strategic Analytics, Corporate

Research and Carrier Services

Mr. Harigobin Jhinkoo EVP Human Resources

Mr. Chairman: Is that it? Okay. And members of the Telecommunications Authority of Trinidad and

Tobago.

TELECOMMUNICATIONS AUTHORITY


Mr. Cris Seecheran Chief Executive Officer

Ms. Nievia Ramsundar Corporate Secretary/Executive

Officer, Legal and Regulatory Affairs

Mr. Chairman: Any other officials present?

Ms. Anika Sarah Farmer Director Legal Services.

Ministry of Public Utilities

Mr. Chairman: Okay, welcome. I am Dr. Victor Wheeler, Chairman of the committee and I would like to

invite members on my left to introduce themselves.

[Introductions by committee members]

Mr. Chairman: Good morning. Welcome. Now today we will be reviewing the Telecommunications

Services of Trinidad and Tobago and the objective of this enquiry is for a public hearing to probe the

operations of the entity before us. I would like to just go through what our objectives are today. First of all

to acquire insight into the company’s financial condition; to determine the strategic direction of the company

for the next five years; to determine the adequacy and effectiveness of the company’s policies and procedures

as it pertains to ensuring accountability, transparency and sound corporate governance in its operations, and

to determine whether these are being adhered to; to be informed of the major achievements or milestones

realized by the company over the past five years, and to gain an appreciation of the challenges faced by the

company; to assess the impact of the opening of the telecommunications market on the company, vis-â-vis

the introduction of other telecommunications service providers; to assess the standard of service delivery to

customers; to determine the effectiveness of the company’s infrastructure, maintenance and upgrade systems;

to understand the relationship between the Telecommunications Authority of Trinidad and Tobago and

TSTT in meeting the regulatory demands of the telecommunications industry; to understand the relationship

between TSTT and its line Ministry—Ministry of Science and Technology—in guiding the company in terms

of its strategic direction.

We were in receipt of pre-hearing information that was requested and this information was only

received yesterday on May 08, and I would like to state, myself and the committee’s displeasure with this late


70

submission, which would mean that we may have to have TSTT appear before us again.

To start off I would like to invite brief opening remarks, first of all from the Acting Permanent

Secretary from the Ministry of Public Utilities, Mrs. Jacinta Bailey-Sobers, just to give some brief remarks.

Mrs. Bailey-Sobers: Thank you very much, Chair. I want to begin by saying, I became the Acting

Permanent Secretary in the Ministry of Public Utilities on March 05, 2014, so I am still learning a lot about

the Ministry and its responsibilities, but I am committed to the task. Just to say, in terms of the TSTT, that

the Ministry has responsibility in terms of TSTT being under the schedule of the Ministry, and as it is we do

receive some performance reports from TSTT as a Ministry, and they are also part of our yearly statistical

digest where we provide information on the achievements of the company. And for now I think that will be

my statement with respect to this matter. Thank you.

Mr. Chairman: And Mr. Goswami, Ag. CEO.

Mr. Goswami: Good morning, Chairman, and good morning members of the committee. My name, as I

have said, is Rakesh Goswami. I am the Executive Vice President for Government and Enterprise Services,

but today I am also the Acting CEO of Telecommunications Services of Trinidad and Tobago, and I have

with me a team of five gentlemen that have already introduced themselves at the outset. It is my pleasure for

our team to be able to be here today and to provide the answers to the questions that you have posed to us.

Since the formation of TSTT in 1991, the company has essentially remained profitable with the

exception of one year in which there was a significant change to our mobile network. As a result the initial

shareholding of $537 million has grown to the point where the company’s shareholder equity, as at December

31, 2013, had increased to $3.2 billion. Moreover, within the last five years without any additional shareholder

investment or external debt financing, the company has aggressively invested almost $4 billion in capital

expenditure towards the upgrade and expansion of its network infrastructure from internally generated

profits.

The opening up of the mobile telecom market proved to be a catalyst for TSTT, where over the past

eight years we have re-invented the business from a phone line that originally used to provide landline,

Internet and mobile, into the country’s only quintuple service provider, which now offers voice, high speed

broadband, TV, security and mobile services. In that time as well the company has diversified its mix of

technology from copper based, digital infrastructure into a wireless, fibre optic Internet protocol-based core

infrastructure. Over the years, the purposeful diversification of our product portfolio and network

infrastructure and the exploitation of innovation have had a number of positive operational effects, such as

the broadening of the customer base, thus allowing a stable annual revenue which is creditable in a time when

competition was causing other incumbents in the region to decline.

Secondly, improving operational efficiencies and savings, most evident of such was reducing cable


71

theft cost that was $25 million annually, to less than one million now due to fibre optic substitution, and also

better network security procedures. To date, TSTT is the most advanced provider of integrated

communication solutions in Trinidad and Tobago and serves all categories of customers from Government

Ministries, conglomerates to microenterprises and individuals.

To sustain the company’s growth in our competitive industry, in August 2013, a robust strategic plan

which maps the steps towards sustainability, profitability and growth was approved by our board of directors.

This plan details strategies to achieve targeted growth in mobile, broadband and the enterprise sector. It also

identified specific areas of improvement for operational efficiencies, that when implemented will customers

even more value and hassle-free service delivery and improve our ability to deploy new technology to the

citizens of Trinidad and Tobago. All of which will strengthen TSTT’s role as one of the key enablers of the

Government’s national ICT initiative.

Moving forward, our vision for TSTT is focused on growth, return on invested capital, and more

importantly, realignment of the company to better serve customers. With these three strategic imperatives

as our guiding principles our, staff, management, and executive team are taking the necessary steps today for

us to become a fully customer oriented, lucrative, modern company. A couple of the examples of the

implementation of our strategic plan have been one to introduce the country’s first gigabit community, where

participating homes have access speeds of up to one gigabit per second. We have begun deploying long-term

evolution or LTE technology, the industry’s fastest, commercially available, high speed, wireless access in

rural and underserved communities, and we have begun deploying more fibre optics to support a tenfold

increase in the number of homes capable of getting better fibre access over the next three years.

Notwithstanding all these, Sir, TSTT recognizes there is still much room for improvement in

managing its cost, transforming the customer service experience and delivering greater value for money to

our customers. The company’s five-year strategic plan speaks to how we intend to make this happen, and

some details of this have been shared in our written submission which you would have received yesterday.

Nevertheless, as we stand ready to begin this review of TSTT, it is also instructive to draw reference

to the cover letter entitled, “Inquiry by Joint Select Committee of Parliament into certain aspects of the

administration and operations of TSTT”, dated May, 08, 2014, addressed to Dr. Victor Wheeler, hon.

Chairman of the Joint Select Committee, from Mr. Charles Carter, Executive Vice President Legal,

Regulatory, and Corporate Secretary. And if you will permit me I will read a small extract from the letter.

“Therefore, TSTT in preparation of these responses has taken every effort to ensure that

nothing should done which could be considered inimical to the best of interests the company or its

Shareholders.

In that case TSTT sought to balance, on the one hand the need to preserve the


72

confidentiality of sensitive commercial information, the disclosure of which could be detrimental to

its best interests, while on the other hand, being completely transparent to the members of the

Committee.

Therefore, TSTT’s responses to the questions sought to comply with the requirements of

the Committee, while simultaneously seeking to safeguard sensitive corporate commercial

information in the interest of TSTT and its Shareholders in a competitive telecommunications

environment in Trinidad and Tobago.”

End of extract.

Chairman, and honourable committee members, we stand ready to begin. I thank you.

Mr. Chairman: Thank you. And Seecheran.

Mr. Seecheran: Good morning, Chair. Good morning all. The Telecommunications Authority of Trinidad

and Tobago was established under the Telecommunications Act of 2001; Act No. 4 of 2001. And initially a

board of the authority was established in 2001, and the Telecommunications Authority formally came into

being as an operational entity in July of 2004 with the proclamation and full passage of the Act and a

Telecommunications (Amdt.) Act of 2004.

The authority is responsible for several areas, notably the first being the opening of the

telecommunications sector as the primary mandate in 2004, and thereafter the facilitation of the orderly

development of both the telecommunications and broadcasting sectors in Trinidad and Tobago for the

responsibility of protecting the interests of consumers, for promoting universal service, which is the provision

of—if you like—with ubiquitous telecommunications services throughout Trinidad and Tobago, and

encouraging investment in telecommunications and broadcasting systems in Trinidad and Tobago.

In view of that mandate or those areas, the Telecommunications Authority has a wide oversight, if

you like, in relation to, firstly the regulation or general regulation of telecommunications, regulation of

broadcasting, and also as a resource management agency in respect of spectrum and in respect of numbers.

In relation to the direct relationship we have with our stakeholders, there are two main instruments that are

used: one, is what we refer to as the concession, which relates to the general conditions and general obligations

of a concessionaire, in the provision of public telecommunications and/or broadcasting services, and also in

the provision of telecommunications network.

The second instrument that we use is called a licence, and this relates to the assignment of spectrum

to our various stakeholders. So in a general context we have a relationship with TSTT, in relation to the

oversight of the concessions granted to TSTT, in relation to their provision of telecommunication services,

provision of telecommunication networks, and also provision of subscription broadcasting services. There

are several licences that have been issued to TSTT, and again we provide oversight in relation to the general


73

obligations that TSTT would have in relation to those licences.

So in a nutshell, Mr. Chair, and members of the committee, that is our oversight responsibility. We

do have as a wide—in relation to our general telecommunications regulatory power, oversight into, what you

might want to call, economic regulatory issues, primarily in relation to pricing, in relation to the tariff structure

of services offered to the public at large. Thank you.

Mr. Chairman: Okay. Thank you. Now onto the next phase. I would like to invite Sen. Small to lead off

the questions.

Mr. Small: Thank you, Mr. Chair. I appreciate the opportunity to be here today. I want to thank the

representatives of TSTT for making time in their busy schedules to be here today, also the representatives

from the Ministry of Public Utilities and the Telecommunications Authority. Okay. Let me get into it.

Mr. Goswami, I also want to thank you. We got the document late and I want to echo the Chairman’s

concern about the timeliness of the delivery of the document; it is a 72-page document. So I stayed up until

4.00 am this morning trying to just make sure I read the entire document, but that is not how the committee—

all—would like to use our sleeping time. But I want to say though that I think the document is a substantive

document in that it addresses the questions in a fairly comprehensive manner. So for that I always like to be

levelled in my comments. I believe that the document is a document that really addresses the comments.

The first issue that I want to ask about, I want to get a sense from the company as to where, given

the competitive environment as it is right now, where the company sees itself? How the company sees itself

now, and potentially where the company sees itself within the medium-term going forward? We have a

competitive environment where there are two players in the market now, and there may be further changes

on the horizon or not, but I would like to get a general sense of how the company is seeing itself being used?

You mentioned that the company is now across five different spheres of business. Could you just give us a

capsule of where you think the company is now and where you think it is going to go in the medium-term?

Mr. Goswami: Dr. Small, thank you for that question.

Mr. Small: Just David; just Mr. Small, not doctor. I “doh” have a PhD as yet. [Laughter]

Mr. Goswami: Sorry. Mr. Small. Your question was, where TSTT sees itself today and where it sees itself

moving in the future, from a financial perspective.

Mr. Small: Strategically, financially, whatever you are able to share with the committee at this stage.

Mr. Goswami: Okay. If I was to direct you to the written response of 2.1—the company’s financial

condition, the first point in there—it lays out the last five years profit margins, both the gross profit the net

profit margins. So the company is still a profitable company, but as you have noticed that our profits are

reducing somewhat. The company looked at its performances, and the company has been very focused on

maintaining a very steady revenue base.


74

As I had stated in my opening statement, the fact that in the face of competition in all our five areas

of services, the fact that the company has been able to maintain a revenue base of approximately $3 billion

consistently, is something that the company has worked hard towards. The company has introduced a couple

of new lines of businesses over the last few years. Again, they are alluded to, and that information is provided

in the answers in the book; specifically the new lines of security services and of IPTV. Those were two new

lines introduced and they have helped in maintaining the company’s revenues.

Earlier last year, as I also alluded to in my opening comments, in August 2013, the management of

the company in conjunction with the directors, it was shared with the shareholders, came up with a five-year

strategic plan. The objective of that five-year strategic plan was to focus the attention of the company into

addressing the areas that the company felt needed to be addressed in order to ensure that the company

remains a profitable entity, provides returns to its stakeholders/shareholders and is a much more

customer-centric organization.

You will see that there is actually a diagram on page 9 which is in response to 2.9, which is the

strategic direction of the company, and the company has taken a position whereby it will be investing in three

main areas of the organization; the wireless area, the broadband area, and then the enterprise and

Government services, which is a combination of both of those areas. Those are the three lines of businesses

that the company will be focusing on. And the company identified three main modes of addressing this, and

that was one. By focussing on service delivery, which will be provided by investing in automating the front

office and the back office processes, such that the customer, by access to the Internet, could log into the

company’s web portal and be able to access its services online. Requests for services, request for a change in

services, choose bundles, and all of this could happen seamlessly for a customer. So it is about service delivery

and service assurance; so that is automation.

We have some large infrastructure projects. And those infrastructure projects include the expansion

of the wireless landscape, providing more wireless modes of technology, expanding our footprint, and also

improving the broadband penetration in the country, and being able to have more broadband accessible to

the citizens of this country in hitherto unavailable areas—like rural communities and other areas that may

not necessarily have had a fixed line service to them.

10.45 a.m.

Mr. Goswami: And thirdly, the organization also realized that its cost based is not in keeping with

international benchmarks. Its employee cost based is not in keeping with international benchmarks and that

is the area of organizational transformation.

So, that is the third pillar or the third main thrust that the organization is embarking on and we are

doing that by virtue of a Voluntary Separation Programme which is currently in play. So, those are the three


75

areas: automation; focus on service delivery; infrastructure which will provide more services in different forms

of technologies to all the citizens of Trinidad and Tobago whether they are Government Ministries,

corporations or individuals, and thirdly, internally re-organized our organization and, in so doing, more

broadband and wireless penetration should be available to the citizens of this country.

Mr. Small: Okay, Mr. Goswami. Thank you very much for that initial response. I want to drill now down

into trying to understand the areas of the business that have been performing.

In your response a couple minutes ago you said some of the new lines you have introduced have

helped to maintain revenues, so that the company's revenue based has been relatively stable, but if the new

lines have helped to maintain revenues then it suggests that some of the previous lines, the revenue numbers,

have fallen off.

So that for the purposes of just trying for us to understand the areas of the company's business that

you consider to be in growth mode, in mature stage in the broadest terms that where you are so that I can

understand the areas of the company’s business you consider to be in a growth mode or those that are either

in mature stage or they are levelled off or they are declining, so we can understand the parts of the business,

how the various constituent parts are performing? And separate and apart from that—well, let me leave you

to answer that first, because I have another question about your internal challenges.

Mr. Goswami: Mr. Small, to answer that question, I think the line of business that is currently worldwide

facing a reduction is the traditional fixed line, the wired service of a phone in your home. This is not unusual

or unique to Trinidad, this is a trend the world over. What we have noticed is that there is more and more a

mobile substitution to the fixed line, and with each newer generation you will notice that they are more likely

to use the mobile handset and Internet technology as opposed to the fixed line. So that is the area that is the

one line that is certainly mature and is not expanding.

The area of growth for us, we introduced broadband technology about four years ago and we had a

very brisk entry into the market and we have, I would say, a very good share of the market at the moment.

There is scope for further increase in broadband penetration across Trinidad and we will be focusing on

providing that both wirelessly and wired, but more from a wireless perspective, utilizing some of the new

technologies like LTE.

The other new area that the company introduced which is doing well is the area of CCTV services

as well as home alarm monitoring. TSTT has a good market share in home alarm monitoring, and the whole

area of CCTV services is a potential growth area for us.

Mr. Small: That helps me a lot Mr. Goswami. With the permission of the Chairman I just have one question

in this round of questions. I have looked at some of your accounts, I understand when I looked at the—you

quoted the international benchmarks about employee cost based and I probably should not quote the exact


76

numbers here but I would say that the mean salary paid per employee is an extremely high number in the

context of Trinidad and Tobago, and I understand that the company had some challenges. You explained

about the VSEP arrangement but when I looked at if you divide the number of employees by the total salary’s

number, it is a fairly large number, and I am just trying to understand, other than the VSEP what is the

company planning to do and more importantly, how? Because issues around managing staff numbers is

sensitive in an unionized environment and I want to get a handle on your process.

Mr. Goswami: Mr. Small, I will redirect that question, with your permission, to our Executive Vice-President

of Human Resources, Mr. Harigobin Jhinkoo, he has a detailed plan of action. Harry.

Mr. Jhinkoo: Thank you very much. TSTT certainly has some challenges around its people cost which, as

the document says, are really high compared to other benchmarks in the industry. In addition to the

Voluntary Separation Programme which we hope will help us to bring that more in line, there are other

initiatives that we will be pursuing in terms of a competency based frame-work that would help us to ensure

that we can harness the human capital a lot more strategically in terms of what would be required to deliver

or our strategic goals and objectives. So, in addition to the VSEP, training competencies, and also a

re-organized organization that would allow us to be more nimble and customer centric, will allow us to

respond to some of the challenges internally around our people development and employee cost.

Miss Hospedales: Mr. Chair, thank you for the opportunity. Seeing that Mr. Jhinkoo was on the floor just

now, I want to direct some of my questions to him. With respect human resource procedures, how many

persons are currently employed in the company, if you can inform us of that please?

Mr. Jhinkoo: TSTT currently—our employee headcount as at April 30, 2014 was 2,537 permanent

employees.

Miss Hospedales: Okay, could you tell us about the staff turnover? I want to know specifically for the

period 2010—2013, if you could tell us about that, as well as if you could tell us about how many persons

have been retrenched for the same period?

Mr. Jhinkoo: Okay. If I may refer you to our document, page 16. As you would see during the period

2009—2013, our staff turnover would have averaged around 2.7 per cent or less than 3 per cent, which we

think have demonstrated that we have had very, very little turnover. It is a very stable workforce. In terms

of retrenchment, I would like to refer you to page 30 of the document, and no persons, not one person has

been retrenched from TSTT during the period 2009—2013.

Miss Hospedales: Mr. Chair, there are other questions I would like to ask but I would like to register my

own, I would say, disappointment to the fact that the reports came in so late, for the record, the majority of

the Members of this committee received the report probably about 10 minutes or 15 minutes before we came

to the committee room here. So, I would like to indicate to you all, yes, you all have a document that you


77

could refer to and turn to page this and that and the other, but it is really highly inadequate to us as Members

when we are asked to scrutinize documents and we do not have the documents available, the information

available to us before, and that is why Mr. Chair would have agreed that we would have to meet with you all

at another time. So, I just wanted to register that.

I would also like to ask about the industrial relations issues, how many of those are actually pending

in court at present?

Mr. Goswami: Chairman, if I may just before Mr. Jhinkoo answers that question. The matter of the late

report has been brought up by a number of your Members and I would like to officially apologize on behalf

of TSTT for the late report. What we wanted to make sure and whilst that is not an excuse, it is just a

statement of fact, it is a fairly comprehensive answer that we were trying to provide and we wanted to ensure

that nothing in the document was inaccurate. In other words, we wanted to ensure about the veracity and

accuracy of the document and in so doing we held on to it for two days longer. The document was actually

ready two days earlier. But I take your point and our sincere apologies. Mr. Jhinkoo.

Mr. Jhinkoo: Again, I would like to refer to page 31 of the document which provides a very detailed table

of the number of matters that are pending and the number of matters that are at the Industrial Court. So, as

at April 01, 2013, the last column we have 202 matters at the Industrial Court, however I would like to point

out that 120 of those matters have been consolidated into one matter, really, but there are individual matters

arising out of an incident that involved 120 employees in 2010. So, 202 matters are currently pending at the

Industrial Court.

Miss Hospedales: Mr. Chairman, I just have one more question. I would like to direct the question to Mr.

Carter because he had sent a letter to the committee indicating that TSTT is not an entity of the State, I would

like Mr. Carter to provide some clarity on that particular issue. Because it came up several times, we have

submission from Afra Raymond as well as we have submissions from the Communication Workers Union

on this particular issue and I would like you all to give some clarity on it. Thanks.

Mr. Carter: Sure. Chairman, Members, thank you very much. TSTT is a unique corporate animal in the

Trinidad and Tobago landscape. We are in essence a private limited liability company registered under the

Companies Act, the shares of which are held by NEL, the National Enterprises Limited, and the Cable and

Wireless. We are still regarded as a state enterprise, depending on the wording of the legislation which is

being referred to. So, for example in this instance, when you look at the wording of section 66.9 of the

Constitution which gives a rather expansive definition of state enterprise to include corporations or

enterprises which are in fact owned and/or controlled directly or indirectly by the Government. TSTT falls

within that wider definition of indirect control and ownership by the Government, because the Government

had in fact sold its shareholding or transferred its shareholding in TSTT to the National Enterprises Limited.


78

So our shares are in fact owned by National Enterprises Limited together with the shares of two

other entities and those shares are in fact traded on the stock exchange. However, if you turn to the Freedom

of Information Act and the Integrity in Public Life Act, the definitions of state enterprises in those two bits

of legislation is not as expansive as in the Constitution, and this matter was determined at the Court of Appeal

level in the Integrity in Public Life Act when the whole issue with respect to whether or not our directors

were required to disclose the information as is required under the Integrity in Public Life Act, and the Court

of Appeal held that we were not, in fact, a state enterprise and as such the directors were not required to file

their declarations. And they looked at the de jure interpretation of control, which, in fact, indicated that once

the State did not have direct control of the enterprise then it could not be, in fact, considered as a state

enterprise. Actually that is a very succinct summary, the actual judgment was quite detailed, but I do hope

that that assist you.

Mr. Chairman: Okay, Mr. Ramnarine.

Mr. Ramnarine: Thank you very much, Mr. Chairman. Although we received the document quite recently,

the diagnosis is pretty obvious. Just for the record of the public, the company’s profits in the year 2009 were

TT $384—and this is page 6 of the document—million; that has since collapsed to TT $49 million in the year

2013, and the company has proffered a response as to the main driver of that decline in profits, and I am

reading from the report, the pivotal reason for the decrease in the company’s profits, is as a result of a court

award as it relates to a collective agreement.

When one then goes to page seven of Appendix A which is the company’s financials, there is the

balance sheet in the back there—sorry, the statement of comprehensive income, the PNL, the company

under “operating expenses” it clearly shows that one in every $4 of revenue, assuming your revenue is TT

$2.9 billion for the year 2013, approximately one in every $4 of revenue goes to paying wages. Is that

essentially a very crystalized way of putting it? So that seems to mean that approximately 25 per cent of your

revenue go immediately to paying salaries and then, of course, you have other costs as part of the cost

structure, maintenance and repairs.

So, therefore, my observation before my question is that, one, it seems that the revenue base of the

company is rather flat, at about TT $3 billion per year. While that is flat you have an increasing cost structure

creeping up on you, which is, of course, eroding your profits and your profit margin is now 1.67 per cent

based on my calculation. You rounded it of to 2 per cent. It is now 1.67 per cent. So, therefore, the issue

of flat revenue, increasing cost has eroded profits.

The other issue is you are now in a very competitive environment where your service delivery, you

will continue to face competition from the other provider, that is how you refer to them in ads and so on,

therefore the issue of service becomes important. Has TSTT— and this comes to my question now which


79

is the second part of my observation competition—cause to be done or has TSTT done audit of its

telecommunications system, in particular its mobile telecoms system to determine how efficient and effective

that is? Because we keeping getting reports, I am sure persons in the room have experienced drop calls and

so on, so that is my direct question.

Mr. Goswami: Mr. Ramnarine, thank you for that question and your analysis of our financials is spot on.

You are absolutely right, and that is what I was alluding to in my opening statement whereby we said our

employee cost are way more than international benchmarks, and that is one of the three key issues that we

are addressing in our strategic plan. And now to your second point about the mobile network and what we

are doing in order to address issues there. I am going to refer it to Mr. Ronald Walcott who is our EVP for

mobile. He has done an in-depth analysis of that.

Mr. Walcott: Thank you Mr. Goswami. Mr. Chairman, Members, morning. In order for us to fully

appreciate where we are today in terms of our mobile network, I think it would be instructive for us just to

go back a couple years to bring us to where we are today.

In 2011 our then Nortel network was deemed to be end of life. End of life because Nortel went

under, there was no longer going to be technical support for this network. It meant then that in 2012 we had

to do what we refer to as a forklift change of our entire network. Doing a forklift change of a live network

was a challenge of itself. We conduct in excess of four million calls a day. For us in the business that

translates into about 14 million call event, a call event to mean hand out from cell site to cell site, et cetera,

as you go from neighbouring positions. And we then had to ensure that while we did this forklift change we

were able to maintain our quality of service standards.

Once that forklift change was completed we did experience higher than normal quality of service

challenges including that of dropped calls. And from then to now we have been working assiduously through

a series of optimization and various strategies to get us to where we are at today. There are international

standards and TATT is next to me here, they have also established standards for dropped calls. TATT

dropped call rate standard for telecom providers is 4 per cent, and international best practice standards is 2

per cent. Our existing dropped call rate is around 2 per cent. This does not mean that we are satisfied with

where we are at today. We continue to be aggressive in our optimization efforts. In any mobile network we

are always going to be focused on three things, and this is a continuing battle. It is going to be quality of

service, it is going to be coverage and it is going to be capacity. Capacity more so with data and mobile

broadband. Mr. Small had asked about some of the growth and Mr. Goswami had mentioned some of them,

but mobile broadband is one of the growth areas for us.

Mr. Ramnarine: Yes, just a follow up on that, so, therefore, the quick answer to the question is that no

audit has been conducted of the telecom systems to determine its effectiveness and efficiency?


80

Mr. Walcott: No, we have done several audits on the network. In fact, Sir, we do optimization drive test

daily. We monitor the network daily and we do audits on the network regularly. TATT, indeed, had asked

us to provide them with a report on dropped calls and we had provided them with a detailed response to

their request, which we submitted to them, one last year and one earlier on this year, detailing all of the

strategies that we employed to alleviate the quality of service challenges.

Mr. Ramnarine: Is it that we need or do not need more cell towers in Trinidad and Tobago to handle the

increase in handsets that we have in the country? Because the average Trinidadian, in my humble estimation,

has two cell phones, some of us have more than two cell phones.

Mr. Walcott: Yes, Sir. Mobile penetration rate in Trinidad and Tobago is 143 per cent, thereabouts. That

is clear. So that would mean definitely that customers have more than one mobile subscription and more

than one mobile handset.

There are coverage gaps which we have identified and in some instances the only way that we can

fix the coverage gaps is by deploying new cell sites. The challenge that we sometimes have with deploying

new cell sites is not one of TSTT’s resources to mean equipment, assigned capital expenditure, et cetera, but

simply getting approvals to do so. Very recently we have had situations where we have identified coverage

gaps in various communities, we have identified the solution which requires cell erection, and persons, for

various reasons, did not want a cell tower in various vicinities, and those are some of the challenges that we

do have. But, yes, some of the coverage gaps can only be filled by deploying new cell sites.

Mr. Ramnarine: Just to summarize, there is a need for more cell towers in Trinidad and Tobago?

Mr. Walcott: Yes.

Mr. Ramnarine: And the answer is yes.

Mr. Walcott: Yes.

Mr. Ramnarine: That is my question.

Mr. Chairman: Member Jeffrey.

Mr. Jeffrey: My question is somewhat different. In terms of veto power, does Cable and Wireless have veto

power in major financial transactions?

Mr. Goswami: Sir, to answer your question, the Cable and Wireless and TSTT relationship is governed fully

and mandatorily by a joint venture agreement that was signed at the inception of TSTT in 1991. Sorry, a

shareholder agreement that was signed in 1991 and is currently in force today. Cable and Wireless has veto

power on capital expenditure.

Mr. Jeffrey: Is that the reason for Government’s willingness to—because there is rumour outside there that

Government is willing to give up 2 per cent of its shareholding to Cable and Wireless, could you share some

light on that?


81

Mr. Goswami: That is above my pay grade, Sir. [Laughter] Chairman, I think that is a matter for shareholders

and, really, as management I really do not have a view.

Mr. Jeffrey: One last question, in terms of, you know, over the years that TSTT has been involved in a lot

of non-core operations, they have all kinds of promotions and all kinds of activities and so on, could you give

us a rundown as to the size of that expenditure on its non-core activities?

Mr. Goswami: I am not sure what exactly you mean, Sir, by non-core. All advertising and promotional

expenditure incurred by TSTT is directed in furtherance of promotion of one or more of its products.

Mr. Jeffrey: I was wondering whether or not the fall-off in profits has to do with anything in that line?

Mr. Goswami: I beg your pardon, Sir. Sorry?

Mr. Jeffrey: I was wondering whether or not the fall in profits had anything to do with its non-core activities?

Mr. Goswami: No, Sir. That expenditure has continued to be decreased over the last three to four years.

Mr. Jeffrey: Thank you.

Dr. Douglas: Mine is a follow up on the issues as it relates to quality of service to customers. I understand

you say 2 per cent, but my own experience is not 2 per cent. When I drive from Arima to Port of Spain,

which I did this morning, and was on the phone this morning and almost every call that I was on had some

level of interruption, so I am not sure how you arrive at the figure of 2 per cent, but my misery is more than

2 per cent of misery that I experienced, and I do not know what the nature of that 2 per cent is, probably I

should ask, how do you evaluate it?

Mr. Walcott: Well, the nature of the 2 per cent, really, is a function of an official definition of a dropped

call. To mean a call that was terminated before the call was supposed to, and that is measured either on the

switch or through the call data records, which we have, and we would look at the abnormal termination of

calls. But, I would say this, Dr. Douglas and Member, we have continued to look at optimizing our network.

There has been challenges. One of the things that we did is, we focused on what we call the golden route

and golden clusters and that was in the submission that we did to TATT, and we looked at from San Fernando

to Port of Spain coming up the highway, we looked at from Arima to—[Interruption]

Dr. Douglas: I am glad you mentioned that Mr. Walcott, because Arima to Port of Spain is my standard

route, right, and I travel on the bus route and the bus route is a complete mess. I do not know, like you have

some problems straight along the bus route, something there eating calls, and I am not sure that it has been

addressed in the last few years that I have been driving. It has been the same thing and I could count all the

spots exactly. “As I cross that little hill there, I know meh call gone; as I reach by St. Augustine there, meh

call gone; as I coming around”—you know, I could tell you all the places, and I am sure if I know them you

know them and I do not understand why we cannot see an improvement if that is known.


82

11.15 a.m.

Mr. Walcott: Yes Sir, and one of the—back to Member Ramnarine’s question, one of the ways in which we

address coverage gaps is by deploying new cells sites. And sometimes we find it difficult to get the necessary

approvals from either the community, from Town and Country, et cetera, to be able to erect the cell sites.

Dr. Douglas: Well I hear you say that, but let me ask you another question, are there any other options

available other than erecting a tower in somebody’s yard that they feel might give them brain damage or some

foolishness like that?

Mr. Walcott: Absolutely, and just to say that, we are not saying that if we cannot get a cell site we would

not look at other options. There are microcells that we can deploy, there are small cells that we can deploy

and there are things that we can do. We look at, for example, in an existing tower, do we increase the power,

but that in and of itself may have challenges in terms of interference, et cetera. We always look at ways and

means by which we can in fact deal with some of those coverage gaps, but at the end of the day sometimes

it may come down to simply deploying new infrastructure and new cell sites. But yes, we do look at other

options.

Dr. Douglas: So you are transposing your system from one old one to the new one or from Nortel to this

or from 3G to 4G as the case might be. And during that period of time, you know, I am experiencing major

disruption in my service especially with an international call, and customers continue to pay the same amount

of money, we do not get any discount, we do not get any call saying, “sorry for…”, you know, do we just

continue to, because I know whole communities that you have to walk out of your house and climb up the

back and go on top of the hill and walk around.

I mean, where I live as a matter of fact, I have to go out in the porch and stand there and “kind a do

so, ah ha, I seeing three bars”, and then you start talking. Do I get—my bill just remains normal, while half

of the day, sometimes in my bedroom, sometimes in my bathroom I have to go and stand up, I do not get

any apology, no credit or nothing. You would not accept that, “ent”, if you go to a hotel and sometimes the

toilet “eh” working and sometimes the shower “eh” working. Well, I do not know if it is you who have to

answer that, but somebody has to answer that to me. I am not talking about one day, I am talking for years

that this is going on. How do we respond to the customers concerns of being dissatisfied with their service?

Mr. Walcott: So, Dr. Douglas we did in fact, when we just did the forklift change, and we are guided a lot

of times by our internal metrics, but also by consumer feedback and quality service challenges that we may

or may not have had. We did consider various options for consumers, and in fact, you would recall or maybe

not, that we did in fact have a campaign, may be a year ago, where we did apologize to customers, we did say

to them that we are working towards a better service delivery. And definitely from our metrics there has

been significant improvement, but we always have to also weight the impact of whatever decision that we


83

may or may not take from its viability in terms of a business and the commercial—[Interruption]

Dr. Douglas: Yeah, but it is not like you are “bussing”, you know, Mr. Walcott. You are making significant

profit, and I do not want you to fail, I do not want you to “buss your own business”, but at the end of the

year if you have hundreds of thousands of customers feeling wounded like I am, you know, you have to find

some kind of way to assuage my sense of insecurity as we face the company, because I start to think all kinds

of things, “if I could get to TSTT someway or the other I will do it”, you know, and I am fairly civilized.

So you have to find—I mean, and some of these things are not little money for people. You know,

people having bills of thousands of dollars and all kinds of things especially on these cell phones, you know.

So you have—I mean, I am sounding a little jumpy, I am jumpy, because this is an issue that has concerned

me for a long time. I can understand if it is just one place or one time or for one month or something like

that, but I am telling you these are situations that exist for years. I know communities where, whole

communities, where they just make up their mind, you know, when they go home they cannot call anybody.

Mr. Chairman: Okay, could we just have, Mr. Walcott, is there a plan to address the Member’s obvious

concerns?

Mr. Walcott: And the short answer to that is, yes. In our five-year plan we have, as Mr. Goswami had

indicated, we are focusing most of our investment on mobile and on broadband and we do accept that we

need to improve, and there is a dedicated plan around quality of service improvement. We do treat case by

case scenarios where we are able to discern that some customers may have experienced above and beyond

what we consider it to be normal, and we will in fact take Dr. Douglas’s comments back.

Mr. Chairman: Mr. Small.

Mr. Small: Thank you, Mr. Chair. I will try to provide some relief to Mr. Walcott, because I also drive from

Arima to Port of Spain every day and I have the exact same issue. This morning I had four dropped calls, it

is normal, every single day. And the reason I am raising it again, not to belabour the point, but I look at your

numbers of officially quoted dropped calls and I have to question the veracity of the source of that

information. I understand you have abnormal termination. How that number, that data is captured,

something is wrong. In my humble and respectful opinion it does not in any way represent the reality of the

customer service experience that people are having right now with regarding especially dropped and missed

calls.

What often happens, somebody calls you, you never hear the call and then an hour later you get a

voice mail saying, “Ay, I tried to call you”, never get the call or tomorrow I might get a text message from

somebody who sent me a text message last week. Those things happen all the time.

So when I look at the presented numbers, for me they probably represent my experience alone. So

I think that in the way in which the numbers are being captured now, I think the veracity of those numbers


84

needs to be relooked again, because I, in my humble experience and along with my colleague, member on

the committee here, we are having a different experience. You are saying that you are within the bench mark

of 2 per cent, I respectfully suggest to you that that number is skewed. I suggest that that number, there is

some margin of error in those numbers. So let me leave Mr. Walcott on that that is just a comment.

I want to just quickly, Mr. Chairman, with your permission, I want to go back to something that was

raised by Member Hospedales, and it has to do with the documentation that came to us and Mr. Carter

offered a very eloquent explanation of the issues around the company’s status on its unique position.

However, as a member of this committee—this committee is guided by the Constitution, and all I wish to

say on that, and I want it recorded, that the enthusiasm level for some of the things that were put in that was

low, because I think that the committee understands very well its role and it is either an organization is under

the purview or it is not. Anything else that happens or happened is very respectfully not germane to what

we have to do here today. And the enthusiasm level for that being pointed out in great detail and being

quoted from, the enthusiasm level was low. I am not—no response is required, I am sharing.

Mr. Walcott you are back on the hook. I noted in your comments you said that there was a forklift

change, and you said that the Nortel network came to end of life. Is it that it just came to end of life suddenly

and that you decided that you need to have a change or was this something that was planned? Because how

it was presented to us, you said it came to the end of life and then you suddenly had to do something. Is it

something that you were expecting and the company pre-planned a series of activities to minimize disruption

or is it something that happened suddenly? I did not really get that from you in your response.

Mr. Walcott: Mr. Small it is a combination of a number of things, but in the main, Nortel went bankrupt

before we were planning to do this whole forklift change. But accepting that to be the case we did in fact

have a whole strategy around how we would conduct this forklift change.

Mr. Small: I will accept that Mr. Walcott. I have one other, permit me, Mr. Chairman, one other issue of

customer service and I have noted in the submissions that there was an expansive statement about the

company’s view on customer service. I want to share the customer service experience of random citizen

“A”. Random citizen “A” saw a promotion in the newspaper, random citizen “A” on that same day it was

offered made a phone call to the call centre, enquired about the details and the details provided on the phone

were different from the details provided on the flyer, in the newspaper ad. Problem one.

On day two of the promotion, random customer “A” goes to the Port of Spain store at 10.40 a.m.,

there are none of the handsets available. On day three of the promotion, random customer “A” goes to

Westmall branch, there are no handsets available, but he is told, random customer A is told, perhaps you

could try Chaguanas or San Fernando. Random customer “A” on day four of the promotion goes to Trincity

centre, and again, at 2.40 in the afternoon they are told that there are no handsets available, and at that point


85

in time there was a line and there was other customers who were irate, why are you having a promotion and

two or three days into the promotion there is nothing available. So there is an issue in my mind with

companies saying listen we want to do this promotion on whatever and then for some reason, unknown, they

are not able to deliver on it.

However, your partner organization who you partner with, who are often close by in the same

establishments have the same models of phones in all various colours and shapes, but down the corridor the

main flagship carrier does not have any handsets available. So there is a struggle as random customer goes

to a store, the flagship company does not have it, next door your partner company has it. So could you help

us to understand what is happening with regards to this element of customer service, because random

customer “A” who happens to be just a random person had this experience and I was confused. Could you

help me Mr. Walcott?

Mr. Walcott: So, Mr. Small there are several things that were said in your question. What I have discerned

from your question may not necessarily be described as one of customer service, but one of availability of a

specific device that was on promotion at some point in time. Is that an accurate assessment of your question,

Sir?

Mr. Small: I will accept that, but if—I view it as customer service because if you put something in the

newspaper and say it is available and then you go to the store and it is not available, I do not agree it would

just be a purely non-availability, because if it is not available in any of your stores then as a customer, no

service was offered to me.

Mr. Walcott: I was just trying to be accurate in my response because the specific details I would have to

investigate and maybe I can respond to that at a later date. However, in any handset promotion, and I assume

that is what we are referring to here, there is generally an accepted number of devices that we would put out

in the public domain. You would appreciate that we would purchase devices and sell them at a subsidized

price which has a cost implication which goes directly to our profitability, and therefore any handset

promotion is governed by the number of devices that we put into the market. That is a pre-planned strategy.

It is never going to be—so you would always find in some instances that there may be persons who, because

of the price of a particular device at a particular point in time may have wanted to avail themselves of the

devices, and given the demand that we may have had at that particular point in time, at the time when they

got to the point of sale to make the purchase they were out of stock.

Now, as I said that is a general comment. As it relates to your specific situation I will have to

investigate, but there is never a promotion that we do that has a specific cost implication for the business

that is not governed by a predetermined strategy around what we are prepared to spend from a cost

perspective given what we hope to achieve by deploying that specific promotion, and there are times and


86

there will always be times when it may occur.

Mr. Small: Thank you very much for your response, Mr. Walcott, and the only thing I want to add in closing

on that is that, if that is the case then if after day three you are out of handsets say, on this promotion the

promotion is ended because demand outstrips supply and people would not bother to be going to look for

it. At least that would help customers to understand well demand was wonderful and we are out. That will

help and save people driving all around looking. Thank you very much.

Dr. Henry: I have a couple of questions here and I would like to get the feedback of the company. I am

not sure who will take this one, but in the scheme of things, in comparison to cutting edge technology

companies, telecommunication companies in particular, where would TSTT rank? Are you up there, middle?

Mr. Goswami: There are a number of different sectors that TSTT is in and we would say that as a stated

policy we are never bleeding edge, we are never officially bleeding edge, but we are fast followers.

Dr. Henry: I am not sure if I understand what a fast follower means. It sounds like given the technical

difficulties and so on, it sounds that you have quite a challenge on your hand, and giving the previous line of

questions under concern raised by Minister Douglas, I am getting the feeling that the company is not quite

up-to-date technologically as it should be, and I want to know how you would rate yourself.

Mr. Goswami: Sir, we do not subscribe the view that we do not have, I cannot remember exactly how you

phrased it, our technology level is not antiquated by any stretch. In fact what we have rolled out in 2013 was

4G, it was HSPA+ in the mobile domain, and what we have earlier this year demonstrated in a pilot project,

the LTE, Sangre Chiquito and in Tobago Golden Lane, was in fact something called LTE which is Long

Term Evolution which in fact is pretty cutting edge.

Dr. Henry: So, is it a question of a human resource problem then if you are saying your technology is

adequate at least, if not top of the line. Are these problems stemming from some kind of human resource?

Mr. Goswami: The problems that had been enunciated are more of a coverage nature, not necessarily one

of a technology nature, and we are continuing to look at various ways of mitigating it.

Dr. Henry: Okay, on a very different note, I would not take too much time on this round, but what is the

company’s position in terms of the setting up of an internet exchange point in Trinidad and Tobago. I

consider this to be a pretty serious matter, and what is your view on that?

Mr. Goswami: I will redirect that question with your permission, Sir, to Mr. Trevor Deane. He is an expert

in that area.

Mr. Deane: We have been working with TATT on the setting up of a local IXP. I am not directly involved

in it, but I believe that there has been a lot of progress if it has not come to fruition already, it is very close

to coming to fruition—

Dr. Henry: I am not aware on any IXP, activity towards an IXP being set up in Trinidad and Tobago at this


87

moment.

Mr. Deane: TATT, would you like to comment?

Mr. Carter: No, actually just let me assist with your permission, Chairman. No, we do have an IXP company.

It is actually jointly owned by the network providers, and we all have members who in fact sit on the

management of that company.

Dr. Henry: Is it operational, Sir?

Mr. Carter: No it is not operational as yet.

Dr. Henry: Okay.

Mr. Carter: Actually we are almost there. What I am saying, we are getting there. It is just that when you

have different network operators trying to achieve the same objectives it takes a little bit longer, but with the

guidance of TATT we are in fact getting there.

Dr. Henry: This gets to the heart of my question, because we have a small country, Grenada, that has set

up one successfully a while now and we are still struggling to bring one into fruition.

Mr. Carter: It is in train, it is in progress. Perhaps, I hear the word struggle, but I think we are beyond that,

but perhaps Chris you can help us here.

Mr. Seecharan: Thank you. Through you, Chair, Mr. Carter was saying there, TATT about two years ago

got involved to facilitate implementation of an internet exchange point or IXP as it is called. We got all the

IXP providers together and discussed how that can be done. At the end of that discussion it was suggested

that a company be established among the various providers. We facilitated that as well—sort of incurred the

legal costs in doing so, but at the end of the day a company called The TTIX, Trinidad and Tobago Internet

exchange Company, it is a private limited liability company that was established. That would have happened

towards the end of last year.

Since that time a board of the TTIX has been established. Meetings have been held and there is a

plan for the establishment of the IXP. All the equipment, the necessary equipment has so far been procured.

A location for the installation of their server—for the switch I should say, has been and already determine

and a contract is in place. The switch has been installed. One company to date has already established

connectivity with a switch, another one is expected to establish connectivity, either this week or I am told by

sometime next week that would make the IXP operational. Those would be two fixed providers. The other

fixed provider I understand will come in no later than next month. There are four wireless IXPs yet to be

connected. There is, I understand a challenge in getting access to the location and a tower needs to be

constructed. This was information I got two days ago.

Dr. Henry: Does this include the big players like Flow and TSTT?

Mr. Seecharan: All the players, yes, yes, all the players. So by the end of next week I expect two of the


88

fixed players to be established and the third fixed player to come in, we understand by June, latest June, and

the wireless providers, there are four of them to come in at a later date because of the requirement to establish

or install a tower on the site. That is the current status.

Dr. Henry: Okay, I will leave it there.

Mr. Partap: Thank you, Mr. Chairman. Mr. Goswami, I would just like to get a follow-up on the wireless

internet that you all—I know you all installed in Sangre Chiquito which is the first one in Trinidad in my

constituency. And you know my constituency, I am a representative of a very rural constituency, and wireless

Internet and Internet on a whole is a very, very, big problem especially for our students now they have,

through the Ministry of Education and the hon. Prime Minister laptops available to them and they do not

have the subsequent internet connectivity. So could you give me some information on your plans for rural

Internet and the wireless internet systems that you all plan to put in, and let me just let you all know there is

some black spots in my constituency and if you have any problems with the cell towers let me know, because

the communities are all for getting cell towers in, whether they are LTE towers to bring in the internet services

and/or for mobile handset use. Thank you.

Mr. Goswami: Chairman, through you, so the response to your question is that that fixed wireless internet

broadband is actually one of the key cornerstones of the strategic plan. It is one of the main infrastructure

developments that is envisage in our five-year plan and in fact we have already started rolling it out. We have

got four macro sites that are in trial and we do have some detailed plans, so by later this year there should be

significant increase in the amount that is available for fixed wireless in and it is specifically target for those

areas where there is no wired internet. And it is going to roll out over the next couple of years and it is the

further details in the strategic plan.

Mr. Chairman: Okay, before going on to Miss Hospedales, I just want someone to explain what is ISP for

some of us who are not so technologically knowledgeable.

Mr. Seecharan: It is an Internet service provider of the likes of TSTT or Flow or any of the providers who

provide Internet-type services, which could be either in a wireless format, via wired connections or in a

wireless format, but the provider is called an ISP.

Mr. Chairman: Okay, so what we were having before this—what was the state of play before?

Mr. Seecharan: No, but there always have been ISPs in the market. The IXP is the Internet Exchange

Point that is where they all come together via a switch so that local traffic—you sending an email to say, Dr.

Henry there, for example, would not have to go to, let us say Miami and switch in Miami and come back to

Trinidad, it would be switched locally. So local—

Mr. Chairman: So, it is an IXP you are referring to earlier on that is going to be built, IXP.

Mr. Seecharan: Yes.


89

Mr. Chairman: “Oh”, okay sorry, I heard wrong then.

Miss Hospedales: Mr. Chair, in the submission made by the Ministry of Public Utilities we are informed

that the Telecommunications Authority had received notice from the Consumer Affairs Division that there

was an increase in the number of complaints received by customers of TSTT—sorry, it is from the Ministry

of Science and Technology, they made the submission. Mr. Chair, when I looked briefly, when I got the

opportunity to skim through the document that was submitted by TSTT they told us that, they provided a

breakdown of the complaints made by—received from the Telecommunications Authority for 2008—2013.

But there is—the document submitted by the Ministry of Science and Technology actually has a discrepancy

in the figures that has been submitted in the report, so I do not know exactly which one really reflects the

true figures of the number of complaints received from the Trinidad and Tobago Telecommunications

Authority. I am referring to page 54 of your document, but then we also have a report, I do not know, Mr.

Chair, we can make it available because then we would need as a committee to know exactly which ones

represent the true figure as against which one do not because we are not sure. There is a major discrepancy

in the figures that are supplied to the committee based on the two separate reports.

Mr. Goswami: Mr. Chair, if I may just to identify an obvious discrepancy in the figures. The complaints

that would have been reported by the Ministry of Science and Technology would have been numbers

provided by the Telecommunications Authority. And these are complaints that are received by the

Telecommunications Authority. They may not necessarily be all the complaints that TSTT would see. We

are the, if you like, second line, if a consumer feels aggrieved after they would have complained to TSTT, for

example, and then they complained to TATT for some sort of resolution that is the complaint that we would

see. So we will not see all the complaints that go to TSTT and whatever would have been resolved by TSTT,

we only get the ones that complainants come directly to us. So our list is a subset of what TSTT would see.

Miss Hospedales: The reason I raised the issue is because in the report that was submitted by the Ministry

of Science and Technology the figures apparently appear to be higher than what is submitted by TSTT in

their report. So that is why I raised the issue.

Mr. Ramnarine: Chair, going back again to the quantitative aspect of the document before us, pages five

and six of appendix A refer to the balance sheet of TSTT, and I am looking specifically now at the liabilities

of the company, and I think that the appropriate person is here, the Chief Financial Officer. The total

liabilities of TSTT is approximately TT $2.2 billion, rounding off to the nearest first decimal place, it is actually

TT $2.16 billion and I approximate it to TT $2.2 billion.

11.45 p.m.

One of the largest components of that is borrowings which are categorized into non-current

liabilities and into current liabilities, but if you sum the two of them together, it is TT $822 million. The first


90

question for the CFO is: these borrowings come from, what I have seen in the notes, bonds that TSTT has

gone out to the market for. Does TSTT have a credit rating? And is TSTT’s credit rating, does it go to

Standard & Poor’s and Moody's and these companies to get a credit rating?

The second question: when Mr. Goswami was introducing the topic for the day, he indicated that

the company had spent some TT $4 billion in a capital investment programme in recent times, and that that

money had come from retained earnings. Is that correct, Mr. Goswami?

Mr. Goswami: Mr. Ramnarine, to confirm what I was stating was that there was no new bond. So we may

have had short-term funding from other financial institutions in the form of lease financing or vendor

financing, but not in the form of a bond. A bond that you are referring to—and the CFO will elaborate—

there has only been one bond that the company actually partook of and that was in 2005 with Citibank, and

that is in its penultimate year of being paid off.

Mr. Ramnarine: So it is not correct to say it was retained earnings. It may have been some retained earnings

and some short-term debt, and so on.

Mr. Goswami: Yes, like vendor financing.

Mr. Ramnarine: So the question remains about the credit rating of the company and whether there are

international agencies which provide the credit rating. I think you have cleared up the $4 billion capital

expenditure question. And the third dimension to my question has to do with trade and other payables which

is approximately $450 million—and I appreciate this is a balance sheet and not a profit and loss statement,

so this would be considering a time period way beyond one year. If the CFO could elaborate as to what is

trade and other payabilities under the current liabilities, because it is a pretty significant figure of TT $450

million. So those are my questions.

Mr. Cooper: Good Morning, Mr. Ramnarine. In relation to the first question, TSTT does not have an

official credit rating by the international rating agencies. That is the short answer. In terms of the applicability

of it, TSTT, just to remind you what Mr. Carter was indicating, is not a listed company. We are an investee

company of NEL, so in terms of our—really, demand for that is not applicable per se. I would say, however,

that our gearing ratio is significantly healthy in terms of telecoms which internationally benchmark for the

more cutting edge—I know Dr. Lesser was asking—is around 65 per cent. We are more between 33 to 36

per cent, and it is in that note that our five-year plan included bond financing.

Just a quick clarification on the second one. In terms of the funding, I think, just to be clear, the

funding for capex, it could either be cash or debt. I am just building upon what Mr. Goswami was saying—

is really just in terms of the balance sheet. Your capex would either be funded really by equity debt or internal

financing, and that is just a clarification of what he meant by retained earnings. In other words, the method

of payment as opposed to debt or cash really was via the company’s own internal profits as opposed to an


91

equity injection. So that is basically how this is financed on the balance sheet.

The final question in terms of trade and other payables, if I could direct your attention—Sir, you

were asking about trade and other payables?

Mr. Ramnarine: Yes.

Mr. Cooper: Sir, you are asking what is the nature of these—

Mr. Ramnarine: What is trade and payables?

Mr. Cooper: It is just under half a billion dollars and basically these are really the short-term loans of the

company as well as the accruals in terms of the ongoing operations, in other words, advertising. All the

expenses of the company that have not yet been paid as at the year-end is basically what would be represented

as trade and other payables.

Mr. Chairman: Dr. Gopeesingh?

Dr. Gopeesingh: Thank you, Mr. Chair. May I personally welcome, as well, the members of TSTT and the

members of TATT. The CDC of TATT is also here as well. I see you have an array of vice-presidents before

us but your President or your chief is not here?

Mr. Goswami: I am acting.

Dr. Gopeesingh: How long has that chief been out?

Mr. Goswami: He has just been out for a week.

Dr. Gopeesingh: All right. The issue of the shareholdings of TSTT—well, 51 belong to the State and they

have been divested to NEL, and 49 per cent belongs to C&W. Did I read somewhere that C&W divested

some of their shares to another company and if so, what is the company?

Mr. Goswami: Sir, as far as we know, they had not divested any of their 49 per cent. They are still holding

on to their 49 per cent.

Dr. Gopeesingh: Okay. Now, when you look at their financial statements which Minister Ramnarine spoke

to and alluded to earlier, you indicated that a lot of your decrease in profitability from 2006, 2007 to about

2011—particularly in 2011—was as a result of the negotiations with the bargaining body and the payment of

salaries and remuneration from the past 2006/2007 negotiations. And then 2011, you pick back up—or is it

2012 that you pick back up?

Mr. Goswami: 2012.

Dr. Gopeesingh: 2012. When is your next negotiation with your bargaining body, for what year to year?

What year is being done now? That is the first question. What do you anticipate if in the prevailing situation

based on the 75 negotiations that have been completed at a national level that had been completed by the

Government and various bargaining bodies, what do you anticipate will be your shortfall that you will have

to pay, from what year to what year? Let me see if you can answer these questions first. And the third on


92

that is, from ’12 to ’14, your profitability has not been the same as in previous years. What do you think is

accounting for the drop in the profitability over a period of time? Is it management weakness? Is it

competitiveness in the market? Could you give an explanation of what is happening?

Mr. Goswami: Chair, you have asked three specific questions. I will answer two and I will refer the third

one to Executive Vice-President of Human Resources, Mr. Harigobin Jhinkoo. The first question, if I recall

correctly, you asked, what are the periods that we are negotiating with our unions. We have, just for the

record, a number of different unions. We have the Estate Police Association; we have our Executive

Secretaries Association as well, and then we have the Communication Workers' Union, junior staff and senior

staff. So the Communication Workers’ Union is the largest one and represents approximately 75 per cent of

our workforce.

Dr. Gopeesingh: Your total workforce again is what?

Mr. Goswami: Two thousand, five hundred and thirty-seven, if I remember rights. The period that is being

currently negotiated with them is for two three-year periods: 2008, 2009 and 2010, as well as 2011, 2012 and

2013. These are the periods that are being negotiated with the CWU.

Dr. Gopeesingh: At the moment?

Mr. Goswami: At the moment, yes.

Dr. Gopeesingh: So your negotiations going back from 2008.

Mr. Goswami: Correct. The last settled negotiation on everything was for the five-year period ending ’07.

To answer your third question as to where we think we are going to fall on that, I am going to let Mr. Jhinkoo

answer that. The third question as to where our profitability has been and the cause of this, as we have stated

earlier, competition is certainly severe and is increasing, but as I had mentioned earlier, our top line, Sir, has

remained fairly stable.

Dr. Gopeesingh: Your top line—

Mr. Goswami: Our revenues. So even though we have lost in certain areas, we introduce new lines of

businesses and so management has been doing a good job of that. I am part of management so for you to

ask me if I am competent or not, or if we are competent or not, we will say yes. [Laughter]

Dr. Gopeesingh: But collectively, you know, an organization can fall based on the collective responsibility

of management.

Mr. Goswami: We feel we have a strong management team, Sir. We feel we have a strong management

team. The issue that has impacted profitability most has been employee cost and Mr. Ramnarine had raised

that analysis earlier, and it is direct cost; it is employee cost and attenuating other costs that go along with

having employee—the overhead cost. That is the biggest factor, and it is something that we have realized

and are addressing as one of the three key pillars in our five-year strategic plan.


93

Hari, if you could kindly elaborate on the second question which was, where we expect this

negotiation—if there is a shortfall that you expect.

Mr. Jhinkoo: Thank you very much. Just to provide a little more elaboration on the response from Mr.

Goswami. The period 2008—2010 for both junior staff and senior staff, with the Communication Workers’

Union are currently before the Industrial Court.

Dr. Gopeesingh: So you cannot comment. It is sub judice, which I understand.

Mr. Jhinkoo: For the period 2011—2013, parties have exchanged proposals. The company provided

counter proposals to proposals submitted by the union. However, the discussions have not progressed far

simply because the negotiations for the prior period have not yet been completed. In terms of where we

anticipate to land, I say it is before the court so it would be a little difficult.

Dr. Gopeesingh: You are protected by the matters now.

Mr. Jhinkoo: Yes. However, I may also wish to say in terms of the other trade unions that Mr. Goswami

mentioned, for the Estate Police Association our negotiations are current. Just yesterday we finalized the

negotiations for the period 2012—2015 with the Estate Police Association. That was finalized yesterday.

For the Executive Secretaries Association, that agreement for the period 2013—2016 was completed late last

year. So we are current with all other negotiations except with the Communication Workers’ Union.

Dr. Gopeesingh: All right. Congratulations on that. Chair, I just want to ask two short questions again.

When I look at the answers that you have provided in your book for the parliamentary committee, one of

the questions was: what areas of operations account for the most revenue gained by the company over the

last five years. I am a bit surprised that your revenue basically—the larger revenue is coming from close

circuit CCTVs and residential alarm, which are two new areas that you have brought in. You are operating

with a large clientele of mobile operators, it is surprising that your mobile area is not bringing any significant

revenue. I mean, it is not at the top of your revenue generation, and if that is so, why is it not so? And I

have seen where your least profitable is. That is the IPT TV stations. Why is the mobile service—

Mr. Goswami: Chairman, through you, Sir, the question we answered was: where is the maximum growth.

That is very distinct, and I draw your distinction of the percentage of the revenues that are generated by other

areas. So mobile is still a very substantial percentage of the total revenue pie.

Dr. Gopeesingh: What percentage?

Mr. Goswami: Sir, due to competitive nature of information, I would seek to answer that in camera, if we

could.

Mr. Chairman: Just to intervene, Dr. Gopeesingh, we did agree—

Dr. Gopeesingh: Yeah, yeah. That is fine.

Mr. Goswami: It is a very significant portion. Actually TATT does disclose the overall mobile pie within


94

Trinidad.

Dr. Gopeesingh: So Mr. Seecharan, when last you disclosed that?

Mr. Seecharan: We have published—our last market report would have been published with figures up to

the end of December 2012.

Dr. Gopeesingh: So the nation as a whole will have the information which—

Mr. Seecharan: Yes. We provide aggregate information. We would not provide individual companies

information. We identify what the total earned in particular sectors and we have identified that in the report.

Dr. Gopeesingh: Why is that—can I, Mr. Chair, just deviate, just from a little thing on the answer: why is

that not disaggregated at a national level when the population should know what is happening at a national

level with each of the providers in the telecommunication industry? Why is that a secret? And what is the

rational for keeping it a secret?

Mr. Seecharan: This is largely at the behest of the various providers and TSTT is not singly in this area.

Dr. Gopeesingh: But you are responsible for TATT, which is your telecommunication authority.

Mr. Seecharan: Yes.

Dr. Gopeesingh: And why does the Telecommunications Authority think it prudent and have it as one of

its major overriding principles that they should not provide the true picture of the earning capacity by each

one of the providers? What is your rational? Anything guides you on the Act; anything guides you on the

regulations pertaining to the Act on it? Because as a country, I think citizens should know that. Is there

anything under the regulations would prevent you from giving that? Yes or no.

Mr. Seecharan: Well, the—

Dr. Gopeesingh: No, no. Is it a yes or no? Is there anything in the regulations would prevent you from

answering that question at a national level and giving that national information as to the various areas of

revenue generation by each one of the telecommunication providers? What is the answer, Mr. Seecharan?

Mr. Seecharan: Well, in response to the question I would say best practice would guide the operation—

Dr. Gopeesingh: It is in the regulation or not?

Mr. Seecharan: I am not sure. I will have to check directly into the regulations.

Dr. Gopeesingh: I think you are evading the question and that is dangerous.

Mr. Seecharan: No, well, I am not sure...

Dr. Gopeesingh: That is dangerous.

Mr. Seecharan: Perhaps you can ask the legal person to answer.

Dr. Gopeesingh: You have a legal person there? Is it in the regulation? Yes or no. Well, if you are the

CEO of the Telecommunications Authority and you have adopt a principled approach for a number of years,

you should be the most important person au courant with that information, of all the matters under the


95

regulations and all the legal matters on that. You are the CEO, and if you cannot answer that question about

a policy that you have put into place, I think something is radically wrong, Mr. Seecharan.

Mr. Seecharan: Chair, if I may. We have had extensive discussions with all the providers. They have

identified to us—

Mr. Jhinkoo: But the providers cannot dictate to you what the Telecommunications Authority—the

Telecommunications Authority must dictate to the providers. If you have mutual discussions and it is not in

the regulation, the country as a whole ought to know what is happening, and if you are hiding from the

country, something is dangerous.

Mr. Seecharan: Well, I am not sure that we are hiding information—

Dr. Gopeesingh: Well, why is it not given?

Mr. Seecharan: Well, there are commercial interests of each organization and I think my legal person just

wants to read out a particular section in the concession.

Dr. Gopeesingh: Mr. Seecharan, I want to proffer to you that what guides the Telecommunication

Association, the TATT, is the law—the Act and the regulations under the Act, and therefore if you have put

in a policy for yourself, that must be explained at a national level. And whether did you seek to bring that

policy under the regulations or seek to get the Minister involved to bring an order in Parliament to have that

under the regulations—to add that as a regulation—that is something that you should consider, but not to

hide from the population what ought to be known to the population. The population wants to know how

much Digicel is making in the telecommunication industry; how much bmobile is making, which is the other

organization in that as well. And something is dangerously wrong with that.

Mr. Seecharan: Through you, Chair—

Dr. Gopeesingh: So we are unable to know what is happening in that area. Are you guided by your Act

and your regulations under your Act?

Mr. Seecharan: Yes, we are.

Dr. Gopeesingh: As you are on that, you are part of this industry as well. You are part of the discussions

with the Joint Select Committee today.

Mr. Seecharan: Indeed. We have been invited.

Dr. Gopeesingh: May I, Mr. Chairman, be permitted to ask this question. The Telecommunications

Authority of Trinidad and Tobago runs, and has the authority over 34 radio station, by and large. A lot of

dangerous and libellous statements are made by commentators and social commentators—

Mr. Chairman: Sorry. Could I just intervene that that, I think, is outside of what we are here today?

Dr. Gopeesingh: But he is representing TATT.

Mr. Chairman: No, but the agency being probed in TSTT.


96

Dr. Gopeesingh: I will come back to that. You are saving Mr. Seecharan this evening. [Laughter]

Mr. Chairman: Well, I think I will want to this morning.

Dr. Gopeesingh: Okay, just let me ask. So you said that the mobile industry has a significant generation

and therefore one of the major producers of your income could be from that.

Mr. Goswami: Yes, Sir. It is from that, as is the land line as well another significant contributor to our line.

Dr. Gopeesingh: A lot of growth is taking place in the other—

Mr. Goswami: Yeah. So in percentage terms of what is the area that grew, it was CCTV. In our strategic

plan, you are absolutely right in pointing out that we do envisage there to be further mobile data growth.

Dr. Gopeesingh: Last question, Chair. Are you losing share market to your competitor or are you gaining

share market? And if you are losing, how much are you losing? You prefer to answer that privately as well.

Mr. Goswami: Yes.

Dr. Gopeesingh: Okay.

Mr. Chairman: Could I just ask Ms. Ramsoondar, I think you wanted to respond to some of what Dr.

Gopeesingh was asking.

Mr. Seecharan: Yes, Chair, if I may, and there are previous questions from Dr. Gopeesingh in relation to

the confidentiality or otherwise of information provided by stakeholders, in his case providers, and the

position of the authority in relation to publication of particular pieces of information. In the opening session,

Chair, I mentioned the fact that there are two main regulatory instruments, the concession instrument, which

essentially provides the obligation in the main, of the providers, and the licensed document which provides

the conditions of use of spectrum.

The concession is the instrument which is granted by the Minister, and perhaps I should say Cabinet,

for the opportunity to provide a public telecommunications service, a public broadcasting service or a public

telecommunications network. I should go to the Act first. Section 22 of the Act identifies most of the

conditions which are to be included in the concession document, and they list several areas. Under section

A-29 of the concession document itself, it says:

“The Authority shall keep confidential any information furnished to it by a concessionaire which the

concessionaire has specifically expressed to be confidential at the time of submission to the Authority

and which is of a confidential nature. The concessionaire shall label such confidential information

at the time of disclosure orally and in writing with a prominently placed label or marking stating that

such information is corporate proprietary and confidential and the Authority shall exercise

reasonable care and take all reasonable steps in protecting such confidential information and in

particular shall take reasonable precautions to procure that such confidential information is only

disseminated to those employees of the Authority that need to know and use such information in


97

the performance of the Authority’s function.”

Dr. Gopeesingh: Stick a pin. I hear what the concession has. So if a particular company (a) operating in

the telecommunications industry, send to you, the Telecommunications Authority, and said, "I would like all

this information, (a), (b), (c), (d), (e), (f), (g), (h), until (z) to be kept confidential, what happens to the nation

as a whole which you are responsible for as the Authority, and the telecommunication provider say that we

want all this information provided to be confidential—what information is given? So is that information

given in the annual reports to Parliament? It is kept away from the annual reports of Parliament? Because

the Minister has to explain and the Minister has to be able to speak to the nation as a whole. He has the

responsibility—he or she. Now, if company (a) say, “Well, I want all of these confidential”, are you by right

have to keep them confidential?

Mr. Seecharan: No, not expressing that all of it. If in the determination of the Authority and through

discussion with the providers, such information may be deemed not confidential. So that is why I started in

the previous discussion to talk about negotiations with the various suppliers. What information is deemed—

Dr. Gopeesingh: So it depends on your whims and fancies as the CEO to determine—

Mr. Chairman: No—

Dr. Gopeesingh: This is a fundamental point, Chair. It is a fundamental point at a national level; what is

given to the national population and what is not given to the national population. It is a fundamental issue,

from the Telecommunications Authority—

Mr. Chairman: Okay. Could we—

Dr. Gopeesingh:—which has the responsibility for guiding the concessionaires.

Mr. Seecharan: Thank you for the further question. Chair, if I may, again, there is a particular clause in the

concession, 830, that reads:

“In accordance with section 80 of the Act, the Authority shall be entitled to disclose any information

received by it where”—

And there are several areas:

“the Authority considers that such disclosure is necessary in discharge of its functions; the

information is or becomes public knowledge other than through disclosure by the Authority; the

information was known to the Authority before receipt from the concessionaire, or the information

lawfully becomes available to the Authority from a source other than the concessionaire or the

concessionaire agrees to the disclosure of the information.”

Dr. Gopeesingh: So you have the ability to disclose.

Mr. Seecharan: Yes.

Dr. Gopeesingh: Depending on how you think.


98

Mr. Seecharan: Right. So there are particular or specific guidelines within the Act and within the Authority

which has guided the Authority’s approach in this matter and we have looked elsewhere in terms of what is

best practice and what is done elsewhere.

Dr. Gopeesingh: Do you have a discretion--

Mr. Chairman: Okay. Could I intervene? Dr. Gopeesingh—

Dr. Gopeesingh: This is the last question. Do you have a discretion on that?

Mr. Seecharan: Well, we do, yes, as I mentioned. We do have some discretion, but it is not exercised

unilaterally; it is through a negotiated process and through collaboration with the various stakeholders.

Dr. Gopeesingh: Thank you.

Mr. Chairman: Could I just remind Members that the focus today is TSTT. TATT—

Dr. Gopeesingh: Mr. Chairman, with due respect, I am asking TSTT. TSTT put the question across to the

CEO of TATT to get the answer, with due respect.

Mr. Chairman: I appreciate that, but TATT was invited to support us probing TSTT.

Dr. Gopeesingh: Yes, we are probing, and this is what we are doing, to get the answers. This is the Joint

Select Committee of Parliament.

Mr. Chairman: I would just like to remind you, Dr. Gopeesingh, on that. Thank you. Miss Hospedales?

Dr. Gopeesingh: I am reminded, Mr. Chair. Thank you. I do not think I need the reminder.

Miss Hospedales: Thank you, Mr. Chair. I would just like to ask Mr. Walcott--I am not sure if I am asking

the correct person--if you could tell us some of the challenges you all would have experienced over the year

with reference to cable theft as well as cable cutting and how much has that costed the company with respect

to restoring the lines.

Mr. Goswami: Chair, through you, Member Hospedales, the correct person to answer from our team would

be Mr. Trevor Deane, if that is okay with you.

Mr. Deane: Good Afternoon all. We do have a table with the actual costs that we have incurred over the

years in cable theft. I am just going to get it. One second. Page 44. So in 2005 there were something like

413 cable cuts, whereas up to last year it has been reduced down to 12 cable cuts. Our security team has been

very effective in alarming many of our significant cables. We have roving patrols. We have precepted officers

who have been very effective again in deterring people from cable thefts. We have assisted the police and

several arrests have been made, as highlighted in the table.

12.15 p.m.

Miss Hospedales: One of the questions I asked was in relation to the cost. How much had it cost? Because,

you know, if a cable was cut or there was a theft there would be a cost attached to restoring the lines. How

much has it cost the company to date with respect to the restoration of the lines?


99

Mr. Goswami: Chair, through you. About—what—five years ago, I believe, the cost was as much as

$25million for a year. We have now successfully managed to reduce it. Last year it was $12 million.

Mr. Chairman: Mr. Jeffrey.

Mr. Jeffrey: Mr. Goswami, given the confusion over whether or not TSTT is a state enterprise or not, and

also the rumour outside there about the 2 per cent situation, there seems to be a blurring in the lines of

responsibility to the Ministry of Public Utilities, the Ministry of Finance and the Economy and—there is one

other—[Crosstalk] the Ministry of Public Administration. Could you—for the benefit of the public—tell us

the different responsibilities to those three Government Ministries?

Mr. Goswami: Yes, Sir. Through you, Chair, TSTT falls directly under the Ministry of Public Utilities. So

Minister Baksh is our line Minister. Right. Our 51 per cent shareholding is held by NEL.

Mr. Jeffrey: Good.

Mr. Goswami: NEL is represented by Corporation Sole as the holder of those shares which fall directly

under the Ministry of Finance and the Economy.

Mr. Jeffrey: Good.

Mr. Goswami: So that is where our two main links really are. The third one you mentioned was Ministry

of Science and Technology, was it?

Mr. Jeffery: No. No. Ministry of Finance and the Economy and Ministry of Public Administration.

Mr. Goswami: We do not really have any line to the Ministry of Public Administration. No.

Mr. Jeffrey: So as far you are concerned that the line of responsibility is basically to the Ministry of Public

Utilities and not the Ministry of Finance and the Economy.

Mr. Goswami: Correct. The Minister that we fall under, the Ministry that we fall under is the Ministry of

Public Utilities. However, NEL as our shareholder is at liberty to ask us any question that they may want.

Mr. Jeffrey: So in terms of investments, what is the situation?

Mr. Goswami: I am not sure what you mean by investments.

Mr. Jeffery: In terms of investment by TSTT, the Ministry of Finance and the Economy has nothing to do

with that?

Mr. Goswami: Well what we do is the management would make a recommendation to its board.

Mr. Jeffrey: Right.

Mr. Goswami: Its board, five members of the board of TSTT including the chairman are appointed by

NEL—

Mr. Jeffrey: Good.

Mr. Goswami:—and four are by Cable & Wireless. The board is who we go to for our approval, and if

there needs to be any shareholder discussion then that would occur between the Ministry of Finance and the


100

Economy and Cable & Wireless.

Mr. Jeffrey: So as for as you are concerned, Ministry of Finance and the Economy and Ministry of Public

Utilities, you are clear in your mind as to what information goes where?

Mr. Goswami: Yes, Sir. We are very clear. The only thing that I would add to that is that there is rule that

if any state-owned enterprise wants to borrow funds, there is an explicit requirement that the Ministry of

Finance and the Economy gives a no-objection certificate. So that is the only time, since you mentioned

about that. Yeah.

Mr. Chairman: Sen. Small.

Mr. Small: Thank you, Mr. Chair, and this will be my last question in today’s round of questions. [Laughter].

I could probably be here all day with questions, but I know it is getting to that hour. This is an easy one, I

think, for the chief financial officer. I just want to get a clarification on a statement made in the document

about the reason for the reduction in profits. It alludes to a point made by member Ramnarine earlier where

he said that it showed that the profits declined over a period for the past five years, and the reason given was

that it was implementing the court award for the 2006 and 2007 collective agreement. But in my looking at

the numbers I have seen—and this is where I need help. The salaries numbers from 2010, 2011, 2012, 2013

are fairly stable, but the profit numbers have dropped off precipitously in those years. So that if the reason

given for the decrease in company profits is the implementing of the court award, but the numbers for wages

and salaries are essentially the same all these years, what else contributed to the reduction in profits? Because

I am not seeing it; probably I have missed. Forgive me for my pedestrian accounting understanding, but just

looking at what I am seeing here, the numbers for 2010, 2011, 2012 and 2013 are just about the same, but

the profit numbers have drop off by an order of 75 per cent. So could you help me to understand what

happened there?

Mr. Copper: Just to be clear. You are referring to—what appendix? What page?

Mr. Small: Okay. I looked on page 6 of your submission; you showed the profits, and then inside of the

financial statements I looked back and I saw that for 2010, 2011, 2012, and 2013 are, more or less, stable

now. I am not going to call the number; a more or less stable number. So that I am saying from where I

look at it, if the reason proffered for the reduction in profits is the implementation of the court award, which

I would think affect in salaries, the salaries numbers which have been presented for 2010, 2011, 2012, and

2013 are essentially the same. And same for 2012 for when it went up and then it dropped back.

Mr. Cooper: Yes. I think that is probably where you lost me. If you are referring to page 6, those are not

salaries; that is gross revenue, and then we have the gross profit and profit after tax.

Mr. Small: All right. Okay. I understand. What I saying is, the profits decreased.

Mr. Cooper: Yeah. Yeah. So—


101

Mr. Small: And the reason given was the implementing of the collective court award.

Mr. Cooper: Yeah. I know. But the only clarification that I am trying to seek is the salaries over—you are

referring—the salaries as far—[Crosstalk] Yeah. The salaries figures that you, as far as we would have

provided were for 2012 and 2013. [Crosstalk]

Mr. Small: I went through researching and I found the document shows 2010 and 2011 numbers which

are essentially the same. So I am saying—I am just asking—[Crosstalk] The document is the report on the

financial statement year ended 2011, which was reported and it is a public document and it shows the salaries

numbers for 2010 and 2011, and then I just used your current document 2012, 2013. So I am saying for

those four years the salaries numbers are stable, but for those same four years the profit numbers have done

this. And the reason given for the profit decrease is the implementation of the court award for the collective

agreement. So that if the reason for the drop in profits is the implementation of the court award for the

collective agreement, which I in my pedestrian accounting means salaries and wages, and salaries and wages

have not changed; what else has caused the drop in profits?

Mr. Cooper: So substantially the percentage of—it is from where we stand—the salaries. When you say it

is not changing materially, you must understand, even if you look at the financials, a $50 million increase

from 2012 through to 2013 is very substantive in terms of the impact, in terms of our financials, that goes

straight to the bottom line. With a fairly consolidated and stable revenue base of just around $3 billion, the

percentage cost—means the percentage cost of our total cost has been increasing significantly from just

around 41 per cent all the way down to over 50 per cent.

Mr. Small: Perhaps we are not connecting. I am hearing what you are saying, but I do not think that your

response responds directly to what I am asking.

Mr. Cooper: You see, if you refer—you see I cannot—

Mr. Small: You cannot see it in front of you. Well I will reserve that question, Mr. Chairman, because

clearly what I am seeing and what you are seeing are two different things. The profits that I have in front of

me for 2010 were like 200-and-something million, and then for 2013 it is $49 million.

Member: Correct.

Mr. Small: But the numbers for original salaries from 2010 to 2013 have remained the same. So that if

profits have dropped off and then salaries have remained the same, but you are saying the reason that the

profits have dropped off is because of the implementation of collective agreements, court award, I am not

connecting with that. It does not connect to me, but I will leave it for the next session.

Mr. Chairman: Yeah. We could also provide—put it in writing for you.

Dr. Gopeesingh: The clarification of that issue—the answer to Cable & Wireless selling off any of the

shares; I have a document here, I do not know—this would have come from us, Chairman? Enquiry proposal


102

JSC (Group 2), and in it states, under page 5, in 2012 Cable & Wireless sold 49 per cent of the Fintel shares

to Amalgamated Telecoms Holding Limited, ATH. Are you aware of that or are you not aware of that? This

is part of the proceedings for today.

Mr. Chairman: No. They would not have received that document. That is a document prepared for us on

topical issues.

Dr. Gopeesingh: We got this information from—

Mr. Chairman: From the media—media reports.

Dr. Gopeesingh: Any comment on that?

Mr. Goswami: I have not seen that document, Sir. So I am not sure about the—

Dr. Gopeesingh: The Chair is guiding us that this came from the media at some time in the past.

Mr. Goswami: But what I can say, Chair, is that Cable & Wireless has been—very publicly and it is on the

website, so this is not any information that I am speaking out of turn—divesting of a number of its other

shareholdings. Most notably the one in Macau, they completely sold that—and they had a majority

shareholding there—as well as most recently they have also sold their shareholdings in Seychelles, where they

had a substantial shareholding there, and have been focusing on the Caribbean. So we are aware of a number

of disposals that Cable & Wireless has made.

Dr. Gopeesingh: So the 51 per cent shares, the 49 that they own in—

Mr. Goswami: The 49 per cent shares that they own in TSTT—

Dr. Gopeesingh:—have not divested any of that 49—

Mr. Goswami: No. They have not. We are pretty sure of that.

Dr. Gopeesingh: So what the public and the media are speaking about is a divestment of shares in a

company outside of Trinidad.

Mr. Goswami: Correct. Yes. Perhaps. Yes.

Dr. Gopeesingh: Last one before—on your issue of disaster management and your role as a provider in

communication and disaster management times, it is feeling of the national community that at major

functions, major events where people use their mobile telecommunication system, and there is a large number

of people using it at that time, there is an overloading and people become frustrated because they cannot get

the connections at a time. Is that something that your company has looked into and what have you done

about it, et cetera, on that? That is the last one I am asking, Chair.

Mr. Goswami: Chairman, through you, you are right, Sir, in that the normal capacity of a cell site would not

allow for a 20, 30, 40 times number of persons being there simultaneously. So for example, if there is a

function at one of the fetes—just for example—and, you know, where normally there would be 2,000

people—sorry, 250 to 500 people and now suddenly you have 5,000 people, there are issues. The company


103

has consciously been following this and we do monitor a number of such known functions, and there are

methods of increasing the capacity, and we have done that quite successfully on quite a few occasions recently.

I do not know if Mr. Walcott wants to elaborate anymore.

Mr. Walcott: Chair, Dr. Gopeesingh, there were two questions; disaster preparedness in general, which we

have responded to in the document, and EVP Trevor Deane can elaborate on that further. As it relates to

the telecom’s network—the telecommunications network in general—hinges on what Mr. Goswami said.

When you spec a network, you spec it based on various parameters, generally around mobility, you have

various contention issues that you would use, but you would not spec a network in such a way that you would

cater for mass event generally. The return on that investment would not support a business case for it. So

when there are mass events—to mean people gathering outside of what the normal specifications would have

suggested—we do in fact look at them on a case by case basis and put various short-term to medium-term

measures in place.

Dr. Gopeesingh: Can I stick a pin, Mr. Walcott?

Mr. Walcott: Yes, Sir.

Dr. Gopeesingh: But a disaster does not tell you when it is going to come.

Mr. Walcott: No.

Dr. Gopeesingh: So you would not be able to predict that that is going to come.


Dr. Gopeesingh: I am just giving you a little example. In the Diego Martin flooding last year, cell phones

were jammed because your tower fell; it was submerged at one time. Now if you are preparing, as a

telecommunication company, for disaster management, you have to have some overriding principled

approach and technical approach, not because you put up a tower site here and it could only cater for 5,000,

but a catastrophic event could happen at a particular area—

Mr. Walcott: Yes.

Dr. Gopeesingh:—and you must be able to have a telecommunication approach to dealing with that

situation, even though it is located at a site where you have one cell tower.


12.30 p.m.

Dr. Gopeesingh: Well, answer me in a simple language.

Mr. Walcott: Well the answer is, yes, we do have a very robust disaster preparedness—[Interruption]

Dr. Gopeesingh: I plead with you that you look at that because this is one of the major drawbacks when we

have major events and, God forbid, we have any catastrophic event, we need the telecommunications, and

we need communication at that time at any particular area. So, could you as a major provider, look into that


104

for us please? Thank you very much.

Mr. Goswami: Chairman, through you, we absolutely take on that point and TSTT feels that it has a

responsibility to the general public at large as well, and all I would add to, apart from just saying, yes, we are

definitely looking at that. We have already formed an alliance with the ODPM, and you would be aware of

the mass texting that occurs in a scenario and even advance warnings where you know something is going to

occur. But, yes, Sir, disaster preparedness is very much on board.

Dr. Gopeesingh: Thank you, look into it.

Miss Hospedales: Mr. Chair, I just want to ask my final question for today; it is with reference to reports

that were in the media with reference to over 2,200 staff members of TSTT protesting because of late pay,

could you all shed some light on that for us?

Mr. Goswami: The bid about that, if the facts, and Harry will bear me out, but I think we were actually not

late in that particular month, it was during the same day. So, the money was not in the account at 8.00 a.m.,

it was in the account at 2.00 p.m., and what we did is that we actually sent out an advisory informing staff

that due to technical difficulties the moneys would be available later on in the day. Harry would you want to

confirm if that was the case?

Mr. Jhinkoo: There was an incident when salaries were actually paid some hours late and it had to do with

a technical difficulty that involved a connection with our bankers and us, but we were well on top of it and

by the end of the day people had moneys in their banks.

Mr. Chairman: Okay, one question I would like to ask is, is there a specific plan to deal with Tobago’s

issues related to mobile and fixed lines?

Mr. Goswami: Yes, Chairman, there are actually some very specific Tobago plans. Tobago was one of the

earliest—Golden Lane, in fact, was the place where we jointly launched LTE. We had some very specific

plans for rolling out fibre as well in certain areas of Tobago and to be able to provide them with broadband

access, and there is also some mobile. There are plans for expansion of mobile services in Tobago. So, yes,

Tobago is very much on our planning map and it forms part of this five-year strategic plan.

Mr. Chairman: I understand there is an underground cable between Trinidad and Tobago?

Mr. Goswami: Yes, Sir, that was—in fact it is a fibre-optic cable, and we were successful in getting that in

place in August or September 2012. What that does is it dramatically increases the amount of data that can

travel between Trinidad and Tobago, and a lot of the services like IPTV, et cetera, that may not have

otherwise been available in Tobago can be facilitated.

Mr. Chairman: And the other thing, and this one may be for TATT. In terms of the spectrum, you said

your organization gives licence for the spectrum for mobile providers, in terms of the spectrum assigned to

TSTT and the competitors, is there a difference in the quality of the spectrum or is it the same?


105

Mr. Seecheran: Thank you Chair. The spectrum that is assigned for provision of mobile services is the

same. So what TSTT would have is the same that Digicel would have, so we try to maintain a balance, if you

like in the assignment, a spectrum in provision of those services. I do not know if that answers the question.

Mr. Chairman: No, I am just going on information I was provided that it may not have been the same and

that may have contributed to some of the challenges that TSTT may have that the competitor may not have.

Mr. Seecheran: I see. Okay, well when the market was first opened in 2005 there would have been some

imbalance in the spectrum assignment, so in fact TSTT would have had a bit more spectrum in the 850 band,

for example. That has since been rationalized, shall we say, so that as we speak the bands used for the

provision of mobile services is the 850 megahertz bands, the 1900 megahertz bands and there are plans for

TATT to offer some 700 megahertz band in the near future. So, as far as the 850 band is concerned, TSTT

has, I believe, 2x7.5 megahertz, a block, and Digicel has a similar block, slightly less but similar. In the

1900 band it is equally in the same.

Miss Hospedales: Mr. Chairman, I would like—I am not sure which member can answer this, if you can

tell us about your procurement procedure and whether or not the board of directors are involved in the

procurement?

Mr. Goswami: Chairman, I would request Mr. Charles Carter, EVP Legal as well as Regulatory and

Corporate Secretary.

Mr. Carter: Thank you Rakesh. Chair, through you, we have a tendering and purchasing policy and

procedure, which is a document—the tenets, the main tenets are contained in this document—you guys could

probably give me the correct page—and it is a board approved document which, in fact, specify in some

detail the procurement process for the purchase of our goods and services. Depending on the value of

whatever it is that you are in fact purchasing will in fact determine the route by which that purchase is made.

So, we can either go through it via a wave of tender method or we can go through it via a full

tendering method. That tendering method can be either by public tenders or what we have in the document

as well—okay, page 32. It is a prequalification procedure whereby we invite members of the public to

prequalify for our goods and services every three years and then we have that list, and when we in fact need

the goods or service people from that list are invited to participate. The CEO has a financial authority limit

to sign off on the purchase of goods and services up to US $1 million, and then once it exceeds that it then

goes to our tenders committee. The tenders committee consists of members of the board of directors of

both Cable and Wireless and NEL appointed directors.

The recommendations are made to them and they make the final decision in terms of whether or

not to purchase a particular good or service. Once the value exceeds $20 million it then goes to the full board

and then the full board will, in fact, ratify any decision made by the tenders committee which goes above that


106

$20 million limit. Again, the full board of directors will consist of both Cable and Wireless and the NEL

appointed directors. So, at certain levels of the purchasing process the company’s management has the

authority, but once it goes above that US $1 million limit, it is then sort of pushed upstairs to our tenders

committee and ultimately to the board.

Mr. Chairman: All right, thank you very much. First of all I want to thank everyone for coming today,

TSTT, Ministry representatives and TATT, the media, the public. We will be communicating with you about

another session but we will send you in writing, and any additional information we seek we will write to you.

So, at this point in time I would just like to adjourn the meeting. Thank you very much.

Mr. Goswami: Thank you, Chair, it has been a pleasure to be here.

12.40 p.m.: Meeting adjourned.


107

APPENDIX IV Capex and Revenue by years and

revenue by major streams


108

23rd Report - Joint Select Committee on Government ... · PDF fileaci american concrete...

Documents

Transcript of 23rd Report - Joint Select Committee on Government ... · PDF fileaci american concrete...