Hondutel Still An Unattractive Investment
The Uruguayan government reportedly submitted a formal proposal for the partnership and capitali s ation of Honduras' state-owned telecommunications company, Hondutel . Consultations on the exact arrangements are due to take place in H213 , although it is believed Uruguay's state-owned telecoms company, Antel , would acquire 51% of Hondutel. An unsuccessful attempt to auction the mobile unit of Hondutel, Ehmovitel , took place in December 2012, but the joint venture failed to attract investment. BMI believe s investment in Hondutel is fraught with risks and Antel would be hard-pressed to turn the company around.
A memorandum of understanding was signed by Uruguayan f oreign m inister , Luis Almagro , and Honduran f oreign m inister , Arturo Corrales, ' to establish a mechanism of political consultations between the two countries. ' In January 2013, the Honduran government approved a direct intervention into Hondutel, to manage and be the top decision-making body for 120 days, in an attempt to save the company from its financial crisis. The MOU between the two f oreign m inisters of Uruguay and Honduras, would appear to be part of a larger political deal , but is evidence of the direct control the government now exerts over Hondutel. Previous joint ventures for Hondutel would only concede 49% of the company to foreign ownership . H owever, the government has overruled the board of directors by allowing 51% to be up for sale, therefore making it a more attractive investment. However, Hondutel is estimated to be losing US$1mn a month , with an operating deficit of US$18mn.
Antel has long-held aspirations to expand into other Latin American markets and was rumoured to be interested in the December 2012 unit auction, ( see our online service, December 12 2012 'Hondutel Looking For Serious Investor' ). In the article, we highlighted the risks to potential investors; high levels of prepaid subscribers, low purchasing power and poor outlook for 3G/4G services. The acquisition of Digicel's operations by Claro , leaves a duopoly at the top of the mobile market, which will make it difficult for Antel to carve out market share. We estimate Ehmovitel has less than 3% of mobile subscribers and will require significant financial resources to challenge Claro and market leader, Tigo .
|A Pre-Eminence Of Prepaid|
|Postpaid Vs Prepaid Total Subs (LHS), Growth % (RHS)|