Contract snuffs out competition; TSTT: dealers getting good deal

Cellular dealers are huffing over a three-year contract that Telecommunications Services of Trinidad and Tobago (TSTT) want them to sign, saying that the contract does not take into account competition when the market is liberalised. A senior TSTT official says that dealers are getting a good deal when compared to other dealers across the region. According to the agreement that dealers are reluctant to sign, there is a contentious provision stating that it “shall continue for a period of three years from the effective date.” It also says that the contract may be renewed for three successive years. But dealers say they are going to let their lawyers have a look at it before signing the document.

One dealer who spoke on condition of anonymity, said it all came down to competition when TT’s telecom market is liberalised. “It’s the same monopolistic attitude,” another dealer said. “If AT&T or Digicel comes and they offer  better terms and conditions, then what are we to do ?” one dealer asked. He noted that if any telecom companies come here, dealers must be able to capitalise on this. They took the view that TSTT was trying to protect its turf when competition comes on stream, noting that three years was a long time in the telecommunication sector. They are still peeved over TSTT’s last strategy that saw GSM phones being sold at a fraction of their cost directly to consumers. Dealers are adamant that those phones should have gone through them. Some dealers say they have been getting the short end of the stick from TSTT. “We are not signing the contract just because TSTT says so,” said one manager at a dealership. TSTT’s Brian Wood, Corporate Sales and Administration Manager, said that dealers will have to make a decision on whether they want to continue to work with TSTT or not. He said while he could understand their concerns regarding the liberalisation of the sector, TSTT had to secure its investment.

“People are trying to hedge their bets,” he said of the dealers’ reluctance to sign. He acknowledged that the level of service provided by TSTT to the dealers depended a lot on their commitment, noting that this will continue and that it all depends on whether or not the contract is signed. He noted though that TSTT in the coming years will be spending a significant amount of money on upgrading the dealership networks, adding that the company wanted to give dealers more independence. He also spoke about TSTT’s telecom thrust and wanted the dealers to be part of the equation. This included GPRS, mobile banking and commerce and gaming. That, he said, could take the form of setting up PCS at dealerships so that the dealers can do the activations themselves. TSTT, he said, can’t make that investment unless there is a certain level of commitment from the dealers. One incentive to sign is  what TSTT is calling residual revenue. Wood explained that for every hand set sold, a dealer will get an activation fee. Dealers will also get a portion of the revenues earned from time spent on the phone by customers. The contracts being offered to the dealers, he said, are better than what Digicel and AT&T have offered other dealers across the region, he said, and dealers know that. He said they needed to compare what other Caribbean dealers are getting before signing the agreement. While competition in the telecom sector is coming, he said TSTT must safeguard its flank and work with the dealers. He said there was nothing stopping the dealers from signing the contract and waiting to see what the competition has to offer.