Hondutel: US$125mn Needed to Set Up Mobile Business

Honduran state telecommunications company Hondutel would need approximately US$125mn to set up the third mobile phone operator in the country, the company's new CEO Jacobo Regalado was reported as saying by local daily La Tribuna.

Regalado's estimations are much greater than the 600mn-lempira (US$32mn) budget Hondutel's former CEO Alonso Valenzuela had speculated was necessary to start using the mobile license in the 1900MHz band (band B).

In addition, on accepting the new post in January, Regalado confirmed Hondutel's budget for 2006 was 400mn lempiras.

Regalado said Hondutel was currently analyzing the legal framework with which it could start offering mobile services.

Hondutel has said mobile telephony may be one of the ways the company can compensate for the loss of some US$75mn in revenue a year it expects to see as a result of the ending of its monopoly of the long distance telephony market on December 25 last year.

Hondutel was gifted the mobile license in part as compensation for it losing its monopoly of the long distance market.

"If we look at Hondutel's legal situation, we are looking for a framework that enables us to be more dynamic as we are a company that sells services and we have to be more competitive," Regalado said.

As well as mobile telephony, Hondutel is looking at a restructuring process to cut operational costs which amount to some 63mn lempiras a month.

Regalado said the company could operate with less than half of the 3,000 employees it currently has but would not give details of potential layoffs before having evaluated every operational area.

The CEO ruled out the option of selling the company, adding that his job was to strengthen it.

BNamericas.com"

Posted to the site on 11th February 2006