Hondutel Faces Financial Collapse

State-owned operator Hondutel is appealing for a government bailout following revelations that it had registered a loss of HNL139.2mn (US$7.2mn) in 2011. BMI believes that outdated technology and a lack of transparency are the main problems it must tackle to improve efficiency. However, as Honduran public finances are under increasing pressure, authorities are reticent to bail Hondutel out. The company is making attempts to improve its network through public-private partnerships, but we believe the company needs extensive restructuring, and perhaps full or part privatisation, if it is to regain efficiency.

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