Monday, February 23, 2009

Guatel Seeks Revival as an Efficient Service Provider

At 10 years of privatization, the Guatemalan Telecommunications Company (GUATEL) seeks to re-emerge and offer its services to state agencies. They are seeking funding of U.S. $5 million to be used for renovation of equipment.

Guatel's properties and goods were sold in November 2008 under the name Telecomunicaciones de Guatemala (Telgua).

Amílcar Barrera, manager of Guatel, explained that the strategy is to sell telecommunications services to the state and to get a slice of the Q400 million that the Government pays for Internet services, data transmission and telephony.

He added that Guatel would be happy with half of that business and would operate successfully because it has the technical capability.

Since August of last year, Guatel has installed 50 kilometers of fiber optics that connect the various ministries of the state. Previously there were only 21 kilometers installed.

The vision is that the 38 institutions that already use the services of Guatel join with other government and municipal entities.

Barrera indicated that the goal is to unify the 333 municipalities of the country by a series of fiber optic rings, which receive and transmit data, voice, and Internet, and which would make use of the 38 microwave towers owned by companies that are spread throughout the national territory.

Another project is that all public schools in the country have access to the Internet.

In the area of data transmission is a health project under the vice president of the Republic. The plan calls for videoconferencing for remote consultation between medical experts and colleagues from the capital.

However, one of the greatest obstacles is economic resources. Each kilometer of optical fiber costs approximately Q5,000 and an annual budget of barely Q23 million barely covers operating expenses, according to Barrera.

Lisardo Bolaños, analyst with the National Center for Economic Research (Cien), thinks that Guatel would not be a good business. "If the concern is rural telephony, it is best to make concessions to private companies and not invest in a white elephant that has never been efficient," he said.

In his view, the fact that it's a government entity does not guarantee that the service will be cheaper or more efficient. He added that "the Government should build its demand for telecommunications services into a single package that could be bid by Guatecompras and get better prices."

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