Trinidad phone company declares post-tax loss
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| Published on Saturday, May 26, 2007 |
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PORT OF SPAIN, Trinidad: Telecommunications Services of Trinidad and Tobago (TSTT) has declared for the first time in its history a TT$122 million loss.
The loss was declared for 2007 after tax.
The phone company described it as a profit warning, revealing that its current preliminary estimate of the loss was for the financial year ending March 31, 2007.
This had compared unfavorably to a post tax profit of TT$261 million for the previous year.
It says the 2006-2007 financial year was significant for TSTT in several ways, and noted that, unlike incumbent operators in most newly-liberated markets, the company retained significant leadership in the mobile market, by nearly doubling its mobile customer base.
However, with this aggressive response to competition from operators such as Digicel and other players, the company incurred a substantial increase in operating costs, which is reflected in mass advertising and a promotion campaign for 2007.
Gross revenues remained relatively flat, even in the face of increased competition.
A major portion of TSTT's decline in revenue is also been attributed to price erosion in the international long-distance market, where revenues declined from TT$379 million in 2005-2006 to TT$290 million this year.
The phone company's focus on defending its revenue streams and expanding its mobile customer base led to a TT$311 million increase in customer acquisition costs.
In addition, TSTT experienced several other exceptional expenses , contributing to its operational loss.
Weak financial and operational controls, which have since been rectified, in the areas of international roaming fraud, pre-paid fraud and bad debt, resulted in losses of nearly TT$100 million.
The company, has also announced it had dismissed 21 employees for fraud.
TSTT's company's Chief Executive Officer, Roberto Peon, said the workers lost their jobs because of alleged involvement in roaming and post-paid fraud. The action came following inquiries into the allegations.
Peon said the police have been informed of the matter and investigations are continuing. |
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