Honduran state-owned operator Hondutel has initiated the bidding process for the sale of a 49% stake in its mobile business, Movitelh, with the government seeking US$75m.
However, despite a reported high number of interested parties experts familiar…
Honduran state-owned operator Hondutel has initiated the bidding process for the sale of a 49% stake in its mobile business, Movitelh, with the government seeking US$75m.
However, despite a reported high number of interested parties experts familiar with the company have expressed doubts that the company can sell the stake for the asking price.
Local media reported that up to 19 companies intend to participate in the bidding process due to start on 2 January 2013.
“I highly doubt that any of Latin America’s traditional operators would be willing to pay the minimum bid of US$75m for a minority stake in a mobile network that lacks national coverage, needs a complete brand overhaul and the deployment of at least two technologies on a national scale to provide similar coverage to the one offered by Claro and Tigo,” said Jose Otero, president of Signals Telecoms Consulting.
Local press has mentioned range of potential partners from in- and outside Latin America, including Israel’s LR Group, Rhino Communications from the US, a Chinese/Guatemalan consortium of Datang and Fideco, Guatemala’s Continental Towers, Uruguay’s Antel, an unnamed Italian company, and a group of Jordanian investors.
Previous privatisation attempts have led to a strong backlash from trade unions, and the company has also been dogged by allegations of corruption and mismanagement in the past.
Wally Swain, vice-president of research at Yankee Group, agreed with Jose-Otero that Ehmovitel required substantial investment because it “has failed to evolve with the changing technology and more importantly with the impact of competition and the growth of mobile”.
Hondutel accounted for a less than 2% mobile market share in Q4 2012, with Millicom’s Tigo and America Movil’s Claro brand dominating the market, according to data from Signals.
In 2007 Honduras tried to privatise 51% of the whole of Hondutel. The only bid received was US$106m from Telmex – the government rejected that as it amounted to around a third of the US$300m it was holding out for.
