President preparing key liberalization announcement

The president of Honduras, Ricardo Maduro, plans to make an announcement within the next two months concerning liberalization of the telecoms sector and related government policy, an industry source close to the government told BNamericas. Another source at incumbent telco Hondutel said company executives were expecting Maduro's announcement on July 15, but admitted that the announcement had already been postponed several times. Progress towards liberalization is evidenced by the government's recent decision authorizing Hondutel to budget US$220mn in capex for 2003-2004. The company originally established that budget for 2003 and then cut it to US$70mn given the possibility that newcomers might make their own investments. However, the government realized that the newcomers would depend on Hondutel's backbone and capillarity, and their arrival in the market might put a burden on the network, so the original investments would be necessary to prepare for development of the market, the first source said. The new government approval relates to 2.5bn lempiras (US$143mn) to be invested through end-2004, and the company source confirmed that projects relating to the second budget of US$70mn have been largely awarded. Most important among these contracts are one for the supply of 3,600 public telephones and one for a fiber optic backbone to link the cities of Puerto Cortes, San Pedro Sula, Tegucigalpa and Choluteca with the El Salvador border.