More questions arise surrounding Hondutel "grey traffic"

Wednesday, September 12, 2007

Allegations of corruption within Honduran state-owned telco Hondutel flared up again on Wednesday after a Mexican newspaper published a report alleging that company officials could be involved.

Mexican paper El Universal printed a report last weekend published by US NGO Arcadia Foundation that charged Hondutel and government officials could be involved in a multimillion-dollar long distance "grey traffic" fraud.

The report found that in 2006 Hondutel's revenues dropped 47% to US$22.9mn and that long distance traffic decreased from 306mn minutes to 151mn minutes compared to 2005.

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As Hondutel is the only company authorized to receive long distance traffic in the country and the overall amount of traffic is unlikely to have decreased a lot, the Arcadia report concluded much of the traffic for 2006 must have been rerouted through illegal operators.

Additionally, the report alleges that Hondutel's general manager Marcelo Chimirri has made significant investments in US companies and increased his personal wealth while the company's earnings falter.

Honduran cable operator Cable Color was also named in the report as being one of the main culprits for the rerouting of the illegal traffic, a charge the company's president César Rosenthal firmly denied, Honduran newspaper La Prensa reported.

Rosenthal was quoted in La Prensa as inviting the US Embassy and the country's Attorney General to look at Cable Color's call records, and calling the allegations politically motivated.

Honduras' telecoms regulator Conatel also issued a statement to local media saying Cable Color is not suspected of being a source or destination for grey traffic.

The allegations of grey traffic have caught the attention of local authorities. Parallel investigations are being carried out in both the country's congress and the public investigator's office known as the public ministry. The allegations come amid discussions of reform to the country's telecoms sector.