Facing a deep financial crisis, the Honduran government-owned telecommunications company, Hondutel (also known as Empresa Hondureña de Telecomunicaciones), needs to secure at least U.S.$500 million in new investments to be competitive in the market. The telecom operator is looking primarily for a foreign investor, and local media outlets reported that international groups have been conversation with the carrier and the government.
The reports state that the consortium Fideco/Datang Mobile of Guatemala and China has signed a technical and economic proposal to take over Hondutel’s fixed telephone, mobile and Internet services. The offer would include paying a U.S.$10 million deposit to take over the mobile business and investments between U.S.$800 million and $1.2 billion. Fideco would assume the carrier’s employee liabilities, estimated at U.S.$75 million. It would also make scheduled layoffs. According to local newspaper El Heraldo, Israel’s LR Group and U.S-based Rhino also expressed interest but did not put forward a proposal.
Meanwhile, Hondutel needs to turn a profit or at least support its current operations. Recently, Hondutel’s general manager, Romeo Vásquez Velásquez, said that paying benefits to laid off workers and those who resign would cost about U.S.$37 million.
Velásquez noted that during his tenure, the company paid about U.S.$10 million in lost wages to reimburse staff who were fired by previous managers and appealed to the Court of Administrative Litigation.
According to Velásquez, much of the state telecom company’s financial difficulties stems from these circumstances. Because of Hondutel’s financial crisis, the Honduran government decided to intervene appointing a special committee headed by finance minister Hector Guillen to oversee the operator.
However, the telecom operator’s issues go beyond the benefit payment situation: Hondutel has been surrounded by allegations of fraud and corruption for many years, an issue which was recently used in political platforms during Honduran elections. The local news website Proceso Digital reported that as manager of Hondutel, Velásquez was charged with blackmail by some aspiring entrepreneurs and presidential candidates who intended to evade the debt they had with the state agency.
Hondutel has a long history of problems. According to the English-version of its Wikipedia profile, the company has been under investigation by Honduran prosecutors since 2007 after the U.S. FBI investigations revealed evidence of large-scale corruption. (Note: Wikipedia’s Spanish profile does not highlight the corruption scandal that is in the English version.)