Hondutel

Creation

The organization was created on May 7, 1976, as an autonomous organization responsible for the modernization of Honduras' telecommunication system, and to achieve a better efficiency in its administration and profitability. Hondutel was historically administered by Honduras' armed forces as telecommunications were considered a matter of national security.

Privatisation attempts

Towards the end of the 20th century, the Honduran government is pressed by the IMF to privatize Hondutel in order to benefit from debt-restructuring solutions and international financial aids.[1] A 1995 law (Framework Law of the Telecommunications Sector) authorized 51% of the company to be sold and privately held.[2] The push towards privatisation was also made by Jaime Rosenthal in 1992, who saw three benefits in this process : bring foreign currency in the country (mainly US dollars), to ensure transparency and accountability, and to boost innovation.[3]

However, a 1995 audit by Price Waterhouse revealed that the company was a high-risk investment thus jeopardizing its privatisation.[1] By 1999, a mere 4.2 lines per 100 inhabitants is accounted.[2]

In 1998, the government is ready to proceed to the privatisation of the company, but the country is badly hit by

Recent history

In June 2007, Hondutel launched its first of a series of Personal Communications Services (PCS) networks. It competes with companies such as Luxembourg's Millicom and Mexico's juggernaut América Móvil. In October, it extended to the Sula Valley, including the cities of San Pedro Sula, La Lima, Villanueva and surrounding communities. In December it extended coverage to La Ceiba.

Currently, it offers mobile phone coverage in the cities of Tegucigalpa, San Pedro Sula, La Ceiba, Olancho, Progress and Copan and surrounding areas.[4]

The administration of President Porfirio Lobo created a commission to study the available alternatives to solve Hondutel's lack of funds. The operator needs to modernize and expand its wired infrastructure and complete its nationwide mobile footprint. Hondutel's dire financial situation has forced the government to intervene in order to provide funds to cover employees salaries.[5] Unofficially it has been said that there are only two viable solutions for Hondutel: either finding a strategic partner that is willing to have the state as a partner shareholder or total privatization.