Snapshot: The situation of Colombian telco ETB

Colombian operator ETB is facing a series of difficulties due to increasing incidents of vandalism and cable theft, as well as an ongoing investigation into the Alma datacenter project and cumulative losses of 30.5 billion Colombian pesos (US$7.6 million) in the first six months of 2024.

Despite the negative result for 1H24, the loss was lower than the 64.4bn pesos that the company reported in the same period of 2023.

“Management maintains reasonable expectations regarding ETB’s ability to maintain its operations,” the firm said in its 2Q24 results report.

“This confidence is based on the accounting basis that the company has maintained to date and which is based not only on its periodic results but also on its constantly growing operating assets that allow the expansion of the customer base and therefore of service revenues,” it added.

ETB's revenues increased from 739bn pesos in the first half of 2023 to 820bn pesos in the first six months of 2024. The company recently signed new loans and refinanced others.

The telco is also betting on migrating customers to fiber optics, which will also allow it to dismantle its copper wire network, which is often subjected to cable thefts due to the high price of the metal.

“Operating activity is expected to grow in the coming years, driven by the final phase of the migration from copper to fiber optics,” the report read.

In March, the company reported 559,000 fiber optic customers, reaching 88% of its user base.

POSSIBLE SALE?

While the Medellín city council discusses the sale of the interest that the city's public utility EPM has in Tigo-Une – now initially approved – in the city of Bogotá they are beginning to review whether state-owned ETB could follow suit or, at least, find a private sector partner to leverage the business.

The members of the Bogota city council "are analyzing whether to sell a part, cede a stake or to form a partnership,” ETB president Alex Blanco was quoted as saying by daily El Tiempo. The company does not believe a sale is feasible, but is instead betting on finding a strategic partner. 

Fierce competition in the Colombian telecommunications market and the difficulties in achieving sustainability led Tigo and Telefónica unit Movistar to announce an agreement to integrate their networks.

Later, Tigo's parent company, Millicom, announced an agreement in principle that includes a possible acquisition of Movistar and the state's stake in Tigo-Une.

Meanwhile, mobile operator WOM has filed for bankruptcy protection.

According to Blanco, ETB is the one with the lowest losses in the sector.

PROBE INTO ALMA DATACENTER

In early August, the attorney general's office announced that it began an investigation into ETB officials over allegedly causing financial damage in a 23.8 billion-peso (US$5.76mn) deal related to the Alma datacenter project. 

According to reports in the media, the agreement signed for the project includes serious anomalies in planning, construction and implementation and the possible loss of the investment made.

Announced in 2015, the Alma datacenter  was never built.