21 July, 2015, 12:00 am
TELECOM Fiji Ltd posted a profit of $18.49million for the financial year ending March 31, 2015.
The positive performance follows five consecutive years of financial losses for the subsidiary of
Amalgamated Telecom Holdings. This week, TFL chief executive officer Mothilal De Silva speaks to Business Editor GERALDINE PANAPASA about the company’s progressive development.
TIMES: TFL’s announcement of a profit of more than $18m and dividend payment of $5m to ATH shows progressive growth in the company. How were these achieved?
DE SILVA: The financial turnaround was achieved through persistent initiatives addressing key business performance areas. Our broad strategies were focused on four different areas.
Those areas included cost recalling and minimisation; revenue maximisation in a segmented market; effective utilisation or monetisation of existing resources and investment rationalisation; and organisational restructuring to increase efficiency by consolidating and streamlining business processes.
TIME: Was the five consecutive financial years of losses for the period 2009-2010 onward a reflection of bad management practices?
DE SILVA: I will not say that previous management had not done anything during that period. They had also helped to realise some set objectives moving forward.
TIMES: During the past consecutive years of financial losses, how much has TFL had to invest in its broad strategies to ensure positive results were achieved?
DE SILVA: Last year, we had invested but not in a big way. We haven’t made any significant investments. For example, one of our broad strategies was the effective utilisation or monetisation of existing resources and investment rationalisation. Our investment last year was not very significant, however, we tried our best to monetise the existing infrastructure and resources.
TIMES: I understand the company embarked on a major cost rescaling and resources rationalisation program about 18 months ago. This included reductions in human capital. Will TFL continue with this reduction in human capital?
DE SILVA: The market is too dynamic and it’s hard to predict this but the company is comfortable with staffing levels. We are continuously finding ways to manage our costs.
The reduction in human capital was part of the asset consolidation. To improve our service delivery value chain, there was streamlining and consolidation. Through this there was a lot of duplication and that was reduced by that exercise. We managed to reduce staff and that made them redundant. With the introduction of new technologies, you may also have to reduce staff.
TIMES: Also part of that cost rescaling and resources rationalisation program was the disposal of certain assets within the company, in addition to rationalised cost in areas of power, annual maintenance, licence and space considerably. What other assets can we expect to be sold off in the near future to achieve or maintain the positive growth pattern?
DE SILVA: We don’t have immediate plans to sell. We have to identify the assets first. There could be some unutilised assets. We have properties all over the country so we have to see first. A good example is the sale of Ganilau House to the FNPF. With the increase in technology, we are occupying one floor of Ganilau House, which means we are paying prevailing rent rates in the Fiji market to FNPF, because our switches are still there. By the end of this year, we might be able to free that space up.
TIMES: What are some challenges forecasted for TFL in the coming years?
DE SILVA: The challenges are on two fronts — one is the increasing use of voice services such as Skype and WhatsApp. People are going to increasingly use those services. Our international segment will be threatened; we are experiencing that in a small way that’s going to be a big challenge in the coming months and years.
The trend coming from mobile operators are also a challenge. However, we have to invest more prudently and optimise our investments. That is the way to go otherwise the loss-making cycle will be repeated.
We have to be innovative to introduce new services and moving into innovative business models to boost revenue share by partnering with different stakeholders. Sometimes we even partner with some mobile operators — that’s the way to go especially to survive in a small market like Fiji because the investment is almost the same as a big market.
There are so many islands in Fiji and you have to provide service to all the islands. Sometimes the investment cost is almost the same as the investment cost in Singapore but you have a good population and affordability there.
In Fiji, the revenue per user is less as well as the number of users but you still have to make the same investment cost so that’s also challenging situation. You have to survive in some way by collaborating. You have to find little ways of doing it.
TIMES: Any other comment regarding TFL’s progress?
DE SILVA: Going forward, Telecom Fiji will continue to enhance its infrastructure and services with an aim to meet customer demands and further improve its service delivery. The company will continue to exercise prudency in its investment decisions in its endeavour for business growth and enhancing shareholder value.