Renewed talks about merger of UTS, TelEm

PHILIPSBURG–There are “renewed talks” about a possible merger between St. Maarten Telephone Group of Companies TelEm and United Telecommunication Services (UTS) Eastern Caribbean. That merger, should it come to fruition, will see the Government of St. Maarten become the majority shareholder with 60 per cent of the merged company.

The merger talks between UTS and TelEm were “revived” after the heads of the two companies met at a recent telecommunications conference in Barcelona, Spain. The two companies are to commission a business plan on the proposed merger, Prime Minister/General Affairs Minister William Marlin told Parliament on Monday afternoon.

TelEm has no ongoing discussion with regional company Digicel. There were talks in the past, but those were halted as TelEm is of the opinion that no outside company should control the country’s telecom infrastructure, said Marlin.

The possible merger was outlined in a Central Committee meeting called by the United People’s (UP) party to get an overview of the state of affairs at the government-owned company.

After the majority of answers sought by UP-leader Member of Parliament (MP) Theo Heyliger were declared of a confidential nature or not for public knowledge as a means of securing the telecom company’s information from competitors, other MPs added their questions to the list. Some of those questions crisscrossed those earlier posed by Heyliger, including whether there was a strategic partner for the company and whether or not a merger was on the table.

Heyliger told The Daily Herald after the meeting that there was “a clear double standard” in the way the answers were given. He was also not in agreement with the company not making its presentation about its state of affairs in a closed session as was requested. He said a follow-up will definitely come soon.

TelEm has paid NAf. 4.3 million in concession and regulatory fees in 2016. The company has paid out dividends totalling NAf. 5.9 million from 2013 to 2015 to Government.

The revenues generated come partly from the 81 per cent market share of international telecom traffic and the 57 per cent market share of mobile traffic via TelCell.

The mobile arm of the group – TelCell has plans to roll out its Long Term Evolution (LTE) service at the end of May.

Government owes the company NAf. 13.6 million as of December 31, 2016, an amount built up over several years.

The loan taken by Smitcoms, the international carrier company of the TelEm Group, to acquire its SMPR-1 underwater fibre-optic cable has been repaid in full as of June 2015. The cable has earned the company money and still has a life span of some seven years.

Money has also been earned from the rental of the Smitcoms building. The rental has put some NAf. 500,000 annually into the coffers of the company.

The cable suffered a break recently and has not been fully repaired. The cable between St. Maarten and Puerto Rico runs through a protected area for which special permits are needed before repair works can be executed, Marlin said in the session. In the meantime, TelEm has purchased additional redundant capacity to ensure service into and out of the country is not affected in the future.

Seamless coverage across the entire island is still not a reality and one option to make this possible was the purchase of Dauphin Telecom, domicile on the French side, by TelEm. However, this never took place as it was “not financially feasible” at the time, MPs were told by Marlin. The company is still looking into the possibility of better roaming for clients.

TelEm is already working with the Police to enable security monitoring in the country.

Following the acquisition of St. Maarten Cable TV for US $4.5 million, TelEm is looking into offering high-definition programming and to use the already available high-speed Internet platform of that company to deliver improved service to some neighbourhoods. Cable TV was purchased “cash-free and debt-free” by TelEm. The former owner took all cash that was in the company and took responsibility for all debts.

Reducing dependence on consultants is a goal of the company. This will be accomplished by continuous training of staff, according to Marlin who delivered all answers to questions posed by MPs though the TelEm’s supervisory board and management were present in full force. He stated at the start of the meeting that Parliament can call the shareholder’s representative to answer questions, but not the board and management.

On the topic of consultants, he added that consultants will be hired to assist with the Cable TV section, a new area of business and expertise for the company.

All MPs congratulated new Chief Executive Officer (CEO) of TelEm Kendall Dupersoy on his appointment. Dupersoy, however, is still to sign his employment contract with Government. This will come in the near future, Marlin said in answering a question posed by Heyliger.

Source: The Daily Herald