Hondutel

Hondutel (Empresa Hondureña de Telecomunicaciones), is the Honduras government's telecommunications company.

It has a monopoly on international calls.

History

= 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.{{cite book |last=Bull |first=Benedicte |date=January 2005 |title=Aid, Power and Privatization: The Politics of Telecommunication Reform in Central America |url=https://books.google.com/books?id=YGf8lENPDEkC |publisher=Edward Elgar Publishing |page=159 |isbn=9781781958087}} A 1995 law (Framework Law of the Telecommunications Sector) authorized 51% of the company to be sold and privately held.{{cite book |date=January 2003 |title=Private Solutions for Infrastructure in Honduras |url=https://books.google.com/books?id=ERQlKLeIBSoC |publisher=World Bank Publicationsg |page=121 |isbn=9780821353660 }} 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.{{cite book |last=Hogenboom |first=Barbara |date=2007 |title=Big Business and Economic Development: Conglomerates and Economic Groups in Developing Countries and Transition Economies Under Globalisation |url=https://books.google.com/books?id=hYaKbYC9LQMC |publisher=Routledge |page=228 |isbn=9781134125760}}

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

In 1998, the government is ready to proceed to the privatisation of the company, but the country is badly hit by hurricane Mitch and reviewed its priorities. Finally, by February 2000, seven companies have pre-qualified to capitalize Hondutel (including Telmex, Telefonica and France Telecom). In October 2000, the bid is launched, but only Telmex remained in the race, with a $106 million offer, which was only a third of the government's expectations. The bid was refused. In 2003, the government approved the sale of Hondutel's B band network, acquired by Megatel. In 2004, it is bought back by América Móvil, owner of Telmex.

= 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{{Year needed|date=July 2012}} it extended coverage to La Ceiba.

Currently{{when|date=March 2016}}, it offers mobile phone coverage in the cities of Tegucigalpa, San Pedro Sula, La Ceiba, Olancho, Progress and Copan and surrounding areas.[http://www.hondutel.hn/gxpsites/hgxpp001.aspx?1,5,77,O,S,0,MNU;E;50;2;MNU;,] {{dead link|date=March 2016}}

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.The following articles describe lack of funds and how the government approved the budget to cover salaries: http://www.latribuna.hn/2013/07/26/francisco-rivera-hondutel-no-tiene-ni-flujo-de-caja/{{dead link|date=September 2017 |bot=InternetArchiveBot |fix-attempted=yes }} and {{cite web |url=http://www.latribuna.hn/2013/08/29/unos-tres-mil-200-millones-de-lempiras-le-aprueban-a-hondutel/ |title=Unos tres mil 200 millones de lempiras le aprueban a Hondutel - Diario la Tribuna de Honduras |access-date=September 15, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20141006134344/http://www.latribuna.hn/2013/08/29/unos-tres-mil-200-millones-de-lempiras-le-aprueban-a-hondutel/ |archive-date=October 6, 2014 }} 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.See analysis describing Hondutel's options: {{cite web |url=http://www.panopticotic.com/2013/08/honduras-hondutel-privatizacion-o-socio.html |title=Honduras - Hondutel: ¿privatización o socio estratégico? ~ el Panóptico de las TIC, Blog de Signals Telecom Consulting |access-date=September 16, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130926204822/http://www.panopticotic.com/2013/08/honduras-hondutel-privatizacion-o-socio.html |archive-date=September 26, 2013 }} According to an Hondutel executive, the operator needs an immediate cash injection of US$150 million to become more competitive.See interview of Heidy Mendoza, Hondutel's operations director: [https://web.archive.org/web/20130804171312/http://signalstelecomnews.com/index.php/entrevistas/8431-para-que-hondutel-resurja-debe-realizar-grandes-inversiones-del-orden-de-us150-millones]

During August 2013, the government announced its intention to auction two AWS mobile licenses and directly grant a third one to Hondutel. The government expects that these new spectrum concessions will be used for the deployment of LTE services.More information about the allocation of AWS spectrum: {{cite web |url=http://www.panopticotic.com/2013/09/honduras-urgente-controlar-expectativas.html |title=Honduras - Urgente controlar expectativas en la próxima subasta de espectro AWS ~ el Panóptico de las TIC, Blog de Signals Telecom Consulting |access-date=September 16, 2013 |url-status=dead |archive-url=https://web.archive.org/web/20130920025314/http://www.panopticotic.com/2013/09/honduras-urgente-controlar-expectativas.html |archive-date=September 20, 2013 }} The Uruguayan government also made an offer that year, suggesting that ANTEL acquires 51% of Hondutel to develop its presence in Latin America, even though Hondutel loses $1 million a month and holds a $18 million operating deficit.{{cite web|url=http://www.bmiresearch.com/news-and-views/hondutel-still-an-unattractive-investment|title=Hondutel Still An Unattractive Investment|website=Bmiresearch.com|date=March 26, 2013|access-date=March 4, 2016|archive-url=https://web.archive.org/web/20160306121936/http://www.bmiresearch.com/news-and-views/hondutel-still-an-unattractive-investment|archive-date=March 6, 2016|url-status=dead}}

In 2015, the company grew its internet capacity by 300% to cope with the ever-rising demand.{{cite web|url=http://www.telecompaper.com/news/hondutel-to-invest-hnl-120-million-to-improve-services--1121542|title=Hondutel to invest HNL 120 million to improve services|website=Telecompaper.com|date=January 6, 2016}} At the end of 2016, the company lowered its prices on internet offers to grow its customers base.{{cite web|url=http://www.laprensa.hn/honduras/1006934-410/hondutel-busca-ampliar-servicio-de-internet|title=Hondutel busca ampliar servicio de Internet|website=Laprensa.hn|date=October 9, 2016|language=es|access-date=November 18, 2016}} On the other hand, Hondutel started to depreciate its nationwide landline coverage and completely shut down service in some rural areas of the country.{{cite web|url=http://www.latribuna.hn/2016/09/12/colgados-les-dejo-hondutel-la-venta/|title=Obsoleto sistema de Hondutel en La Venta|website=Latribuna.hn|date=September 12, 2016|language=es|access-date=November 18, 2016}}

Financial statements

class="wikitable" \|+ Hondutel's yearly profits ! Year ! Profit (in HNL millions)
2011 \| −250{{cite web\|url=http://www.hondurasnews.com/honduras-telecomunications-company-hondutel-become-public-limited-company/\|title=Honduras Telecommunications Company "Hondutel" to become public limited company\|website=Hondurasnews.com\|date=January 22, 2014}}
2012 \| −500
2013 \| −574
2014 \|
2015 \| 80

class="wikitable"

|+ Hondutel's yearly profits

! Year

! Profit (in HNL millions)

2011

| −250{{cite web|url=http://www.hondurasnews.com/honduras-telecomunications-company-hondutel-become-public-limited-company/|title=Honduras Telecommunications Company "Hondutel" to become public limited company|website=Hondurasnews.com|date=January 22, 2014}}

2012

| −500

2013

| −574

2014

2015

| 80

In 2014, it was revealed by an informer from the secretary of finance that between 2000 and 2012, Hondutel informally wired 17 million of lempiras to the country's government, including 10 million in cash.{{cite web|url=http://www.elheraldo.hn/economia/609971-216/gobierno-llevo-a-la-quiebra-a-hondutel-al-descapitalizarla|title=Gobierno llevó a la quiebra a Hondutel al descapitalizarla|website=Elheraldo.hn|date=April 7, 2014|language=es|access-date=November 18, 2016}}

In 2015, Hondutel closed its fiscal year with a HNL 80 million profit, largely benefitting from the internet and mobile boom, along with heavy job cuts.{{cite web|url=http://www.latribuna.hn/2015/10/22/hondutel-no-cancelara-mas-empleados-orlando-mejia/|title=HONDUTEL no cancelará más empleados: Orlando Mejía|website=Latribuna.hn|date=October 22, 2015|language=es}}

Corruption scandal

President Manuel Zelaya appointed his nephew{{cite web|url=http://www.laprensahn.com/Sucesos/Ediciones/2009/07/02/Noticias/Capturan-a-Chimirri-ex-funcionario-de-Zelaya |access-date=December 6, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20090705173446/http://www.laprensahn.com/Sucesos/Ediciones/2009/07/02/Noticias/Capturan-a-Chimirri-ex-funcionario-de-Zelaya |archive-date=July 5, 2009 |title=LaPrensa.hn - Inicio }}Marcelo Chimirri as deputy president of the state-owned Hondutel.

FBI Criminal Division's Fraud Section revealed that Latin Node Inc., an American company, had illegal dealings with Hondutel executives[http://miami.fbi.gov/dojpressrel/pressrel09/mm040709.htm Department of Justice Press Release] {{webarchive|url=https://web.archive.org/web/20101003082642/http://miami.fbi.gov/dojpressrel/pressrel09/mm040709.htm |date=October 3, 2010 }} The affair was later reported in the Honduran media.[dead link {{cite web |url=http://www.laprensahn.com/ediciones/2007/09/15/ordenan_a_chimirri_dar_datos |title=La Prensa - Ordenan a Chimirri dar datos / 15 / 09 / 2007 / Ediciones / La Prensa |access-date=November 9, 2007 |url-status=dead |archive-url=https://web.archive.org/web/20071111160005/http://www.laprensahn.com/ediciones/2007/09/15/ordenan_a_chimirri_dar_datos |archive-date=November 11, 2007 }} Ordenan a Chimirri dar datos] Marcelo Chimirri unsuccessfully sued journalists for libel that had published the corruption scandal.[dead link {{cite web |url=http://www.laprensahn.com/ediciones/2007/10/04/inadmisible_querella |title=Noticias Elecciones Presidenciales 2012 en Estados Unidos – Diario la Prensa de Honduras |access-date=November 9, 2007 |url-status=dead |archive-url=https://archive.today/20130127151437/http://www.laprensahn.com/ediciones/2007/10/04/inadmisible_querella |archive-date=January 27, 2013 }} Inadmisible querella]

An unknown individual posted various recordings of high government officials on YouTube, possibly implicating them in a corruption scandal concerning Hondutel.[http://www.laprensa.hn/ediciones/2007/11/08/casi_300_mil_visitas_a_las_grabaciones Casi 300 mil visitas a las grabaciones] {{webarchive|url=https://web.archive.org/web/20071110070212/http://www.laprensa.hn/ediciones/2007/11/08/casi_300_mil_visitas_a_las_grabaciones |date=November 10, 2007 }} After Zelaya made a complaint to the police, they launched an investigation to find who had made the recordings which are considered espionage and a violation of Honduras' privacy laws. The investigation included searching the home of Marcelo Chimirri and both his office at Hondutel and those of other members of staff,{{cite web |url=http://www.laprensa.hn/ediciones/2007/11/10/policia_catea_vivienda_de_chimirri |title=Archived copy |access-date=November 14, 2007 |url-status=dead |archive-url=https://web.archive.org/web/20071112084932/http://www.laprensa.hn/ediciones/2007/11/10/policia_catea_vivienda_de_chimirri |archive-date=November 12, 2007 }} Policía catea vivienda de Chimirri the former was an action condemned by Zelaya.{{cite web |url=http://www.laprensa.hn/ediciones/2007/11/11/zelaya_condena_accion_policial_en_allanamiento_de_casa_de_chimirri |title=Archived copy |access-date=November 14, 2007 |url-status=dead |archive-url=https://web.archive.org/web/20071114102406/http://www.laprensa.hn/ediciones/2007/11/11/zelaya_condena_accion_policial_en_allanamiento_de_casa_de_chimirri |archive-date=November 14, 2007 }} Zelaya condena acción policial en allanamiento de casa de Chimirri On November 4. Marcelo Chimirri resigned from his post at Hondutel in January 2007. In January 2008 the United States embassy confirmed that Chimirri would not be allowed to enter the US.[https://web.archive.org/web/20080128105540/http://www.laprensa.hn/ediciones/2008/01/25/estados_unidos_prohibe_entrada_a_chimirri Estados Unidos prohíbe entrada a Chimirri]

In May 2009, U.S. Attorney General Eric Holder decided to release the names of officials A, B, and C. Honduran investigators were going to visit the United States to seek evidence collected by the United States.{{cite web |url=http://www.laprensa.hn/Especiales/content/view/section/197822 |title=EUA revelará nombres de los funcionarios A, B y C - Especiales - LaPrensa.hn |access-date=December 7, 2009 |url-status=dead |archive-url=https://web.archive.org/web/20100224154920/http://www.laprensa.hn/Especiales/content/view/section/197822 |archive-date=February 24, 2010 }}

Apart from Chimirri Oscar Danilo Santos (the former manager of Hondutel), Jorge Rosa, and James Lagos are all charged in connection with allegedly committing crimes of abuse of authority, fraud and bribery having received bribes of 1.09 million U.S. dollars of an international carrier in exchange for Hondutel give them lower rates than other firms. While the auditor Julio Daniel Flores was charged for the lesser crime of violation of duties of officers.{{cite web |url=http://www.elheraldo.hn/index.php/Ediciones/2009/11/24/Noticias/Jueza-ratifica-medidas-cautelares-a-Marcelo-Chimirri |title=Buscador - Diario el Heraldo Honduras |access-date=July 26, 2010 |url-status=dead |archive-url=https://web.archive.org/web/20150924024932/http://www.elheraldo.hn/index.php/Ediciones/2009/11/24/Noticias/Jueza-ratifica-medidas-cautelares-a-Marcelo-Chimirri |archive-date=September 24, 2015 }}

{{citation needed span|text=In 2012, a Florida Corporation named Suncoast successfully sued Hondutel for fraud in Suncoast Tech Corp. v. Hondutel. A judgment was awarded against Hondutel for fraud in the Federal Court, Southern District of Florida in excess of $900,000|date=March 2016}}.