Hondutel might resort to PPPs to survive

Monday, December 29, 2014

Honduran state-owned telecom Hondutel might have to resort to private investment to bring it out of its financial crisis, El Heraldo reported.

Hondutel manager Jesús Mejía said the company needs an initial investment of around US$200mn, which the government "is not in a position to pay."

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Therefore, the teleco is considering opening up some sectors to private investment via public-private partnerships (PPPs) - mobile telephony and data are the two most likely to attract the interest of investors, he said.

However, Mejía's latest assessment is more optimistic than previous ones, which pointed to US$600mn in needed investment for Hondutel to survive.

Hondutel reported a loss of 189mn lempiras (US$8.97mn) for the first nine months of 2014, compared with a loss of 752mn lempiras in the same 2013 period.

Congress allocated 86mn lempiras to the company earlier this year for infrastructure improvements and has been in talks with potential foreign investors. Hondutel had to cut its expenses and suspend 700 employees in September.