Home' Trinidad and Tobago Guardian : May 4th 2014 Contents The new chief executive of Cable &
Wireless Communications (CWC)
has described TSTT, in which CWC
owns 49 per cent, as a failing enter-
prise that is unlikely to be in a position
to declare a dividend for the year ending March
In an interview on Wednesday at the Carlton
Savannah in St Ann s, CWC s Phil Bentley
Bentley said he is recommending that Gov-
ernment adopt the Bahamas model to allow
CWC to buy two per cent of TSTT and place
it into a non-voting trust fund.
This would give CWC management control
of TSTT, which the English company has want-
ed for many years, primarily because it allows
for the consolidation of the subsidiary s profits
and greater synergies in terms of procurement,
which lowers the cost profile.
Bentley and executive Chris Dehring met
with Finance Minister Larry Howai last week.
Bentley, who came to CWC after a career
that included BP, British Gas and Diageo, took
issue with a position espoused by Joseph Remy,
the president of the Communications Workers
Union (CWU), that all of the financial earnings
of TSTT should accrue to the benefit of T&T
Bentley said: "The truth is that no value of
TSTT is accruing anywhere because there isn t
a dividend and the only value of financial earn-
ings from telecoms in T&T go to FLOW and
Digicel shareholders, who are both privately
owned companies without a unionised work-
"What is he arguing for? To let Digicel and
FLOW continue to beat TSTT."
It was put to Bentley that the CWU may
be afraid that if CWC is given management
control of TSTT by the Government that the
foreign telecom provider would retrench 50
per cent of TSTT s workforce in an attempt
to reinstate profits at the local telecom provider.
To this Bentley said: "There is already a vol-
untary separation programme in place at TSTT."
Questioned whether most TSTT employees
would prefer to stay in their cushy, high-paying
jobs, some of them doing little or nothing,
rather than accept voluntary separation, Bentley
said: "I m told TSTT has a Telex department
and has not sent a Telex for ten years."
Responding to the point that the union may
fear retrenchment, Bentley said: "I would want
to invest. I would want to create jobs. I would
want to grow the business-to-business aspects.
I would want to get television working and
put a fast broadband in. And I would want to
give our customers more reasons to choose
us."He said that if TSTT continues to lose cus-
tomers, the enterprise would eventually go
"bust," which would mean local taxpayers hav-
ing to subsidize TSTT.
"This is the irony about all the benefits going
to T&T nationals. They are going to have to
start paying out to support the loses at TSTT.
The Government is going to pay out: that s
you, the taxpayer. And CWC will have to carry
on paying out. And we aren t going to do that."
The telecom executive then questioned what
TSTT s customers want and answered his own
question, saying that they want a successful
He added that TSTT s problem was that it
was losing customers---he estimated that in
mobile, the local company had gone from an
80 per cent market share three years ago, to
45 per cent today---but that it has not adjusted
"At the end of the day, this is a business.
We invest money and hope to get a return. If
we can t get a return, we will go somewhere
else. We have got lots of options," said Bentley.
CWC s discussions with regard to TSTT s future
come as the company enters the final stages
of reorganising its once-global business to
Guardian Holdings Ltd (GHL)
has reported after-tax profits
attributable to its shareholders
of $86.5 million for its March
31 first quarter---a 24 per cent
increase over the comparable
performance in 2013.
In the GHL chairman s report,
Arthur Lok Jack said: "Having
decisively put measures in place
to deal with legacy issues in our
non-core operations, the group
is able to drive increases in share-
holder value through its strong
portfolio of pan-Caribbean non-
bank financial companies."
Lok Jack said the pan-
Caribbean insurance franchises
of Westmoorings-based GHL
continued to produce excellent
results with gross premiums
increasing by 16 per cent to $1.99
Both the Life, Health and Pen-
sions (LHP) and the Property
and Casualty (P&C) insurance
segments contributed to the
increase in gross premiums with
the LHP segment growing by
$138 million and the P&C adding
The group s net income from
investing activities improved by
15 per cent in the first quarter
compared with last year.
Lok Jack said that the com-
mercialisation of the Pointe
Simon real estate project in Mar-
tinique was progressing well and
in line with the group s targets.
He said recent rentals and sales
have demonstrated that the
write-down that GHL incurred
in 2013 has put Pointe Simon in
a commercially viable state.
Lok Jack said: "Overall, your
board is very satisfied with the
group s performance in this
quarter. Our insurance compa-
nies continue to be well capi-
talised and the integration of our
three acquisitions is nearing
completion and on schedule.
"We are on target to com-
pletely terminate all exposure to
our only remaining Lloyds Syn-
dicate during 2014 and the
reserving continues to be at a
level where this termination is
likely to generate a surplus."
The GHL chairman indicated
that the group is positive about
the outlook for the rest of the
MAY 4 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
COVER STORY | SBG3
GHL profits up 24 per cent
CWC may apply for
third mobile licence
focus its operations on the Caribbean and
In January 2013, CWC agreed to sell its 51
per cent of its stake in Macau Telecom to
CITIC Telecom, a unit of China s largest state-
owned investment firm, for a total consider-
ation of US$749.7 million.
Just last week, CWC sold its 55 per cent
stake in Monaco Telecom for US$445 million
(TT$2.8 billion) to Xavier Niel, a billionaire
French entrepreneur and industrialist. This
was ten per cent more than a previous trans-
action that was blocked by the principality of
Monaco, said the CWC chief executive.
Bentley said the proceeds from the sale of
the Monaco business gives CWC "the head-
room to invest in the region where we are now
CWC s focus on the Caribbean and Central
American has been underscored by the fact
that Bentley is now based in Miami, which
allows him to fly to anywhere within the new,
reduced footprint of the company within three
Asked to outline the size of CWC s war
chest for investment in the region, Bentley
said: "I don t think there is a limit. If it s the
right deal we would issue equity if we needed
to. The limit is where are the opportunities
in the region. My focus is on the core of our
business: we need to have the best mobile
network; the fastest broadband speeds; the
best television and fibre optic cables."
He said there are many other places where
there is demand for capital, where CWC would
have a greater chance of generating a return
on its investment.
Asked what had become of the proposal by
CWC to sell its 49 per cent stake in TSTT,
which involved hiring investment bankers in
New York, Bentley said: "Who wants 49 per
cent of a business that is making no money."
Questioned about CWC s real options, the
telecom executive said: "We have a number
of things we can do: We would like to sit down
with the Government and the union and talk
about being able to consolidate TSTT and
bring it into the CWC family.
"Option two would be if we don t feel we
could ever make progress here, we would look
to maybe take a third mobile licence here and
come at it from a competitive point of view
where we don t have any of the constraints
of pass union rates. We would start again.
"Thirdly, we could stay where we are and
just walk away at some point.
"In business, you have to have options and
at the moment, the only thing we have now
is 49 per cent of a business that is failing.
"I don t like that option, so I am trying to
create some new options."
Questioned about his use of the word "fail-
ing" with regard to an enterprise in which
CWC has a 49 per cent stake, Bentley said:
"It s failing in terms of its customers. If we
had 80 per cent three years ago and now we
have 45 per cent, is that success?
"It s not making a return on its capital. You
tell me what word you want to use for a com-
pany that is not making a return on its cap-
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