Talks being held about TelEm, UTS merger, TelEm sale halted

PHILIPSBURG–The shareholders of United Telecommunications Services (UTS) have agreed to hold talks with the TelEm Group about the two companies partnering and merging.

Prime Minister William Marlin, who said on Wednesday that he had pulled up the handbrakes on the sale of the TelEm Group, said the intention is to create one solid and strong company for the country.

Marlin said once the process is completed, TelEm will have majority shares in the merged company with TelEm holding 60 per cent ownership and UTS 40 per cent.

Having the two companies partner is expected to “strengthen” the local telecoms company, he noted. He said once this process is completed, then parties will see if it’s still necessary to “bring in bigger partner from outside” or whether TelEm and UTS would be able to move forward, survive and offer better services than both are offering now. As it is at the moment, TelEm and UTS are competing against each other for a small market while, if they work together they can pool their resources and manpower. “When we look at what is offered in Curaçao to what is offered in St. Maarten and we look at the megabytes users in Curaçao get for a way less price, you wonder where that difference comes in.”

As it relates to the talks about the sale of TelEm Group, Marlin said, following concerns expressed by the union representing TelEm workers sometime back, he had halted that process. The board and management had also been informed that the decision to partner had been taken many years ago and government would have to revisit this decision today as the process had taken “way too long.”

He said talks about the possibilities of partnering between TelEm and UTS’ local operations, had been ongoing for some time. He alluded to the many complaints from telecom users, including himself, about dropped calls, connectivity issues and high Internet rates compared to providers from other islands including French St. Martin.

In the meantime, UTS has made it clear that it is looking for a strategic partner as a matter of survival. Chief Executive Officer (CEO) Paul de Geus said recently that “without a strategic partner we (UTS) will be dead.” According to de Geus, the new government to be installed after Curaçao’s election next week should have this as one of their priorities. The decision to search for a strategic partner was made at the beginning of this year, but now the government-owned company is in the execution phase.

Both the shareholders (Curaçao and St. Maarten) and the Supervisory Board gave the green light for this process. During a press conference, De Geus stated that they need approval of the two governments. It is possible for Curaçao to buy St. Maarten’s shares, but St. Maarten is also in agreement on the privatisation and in De Geus’ view the better option is to work together on this process. “Both countries are in the process of elections and this could bring some delay to the process,” he said.

De Geus also expressed his concern about having new ministers in charge of the company. “You don’t know if these persons have the same ideas and agenda as they now have. Maybe we need to begin a new process.”

However, according to the CEO, whatever the results of the elections, UTS needs a strategic partner. “People are calling less and making more use of the Internet. What we receive for our Internet services is a lot less than our income for calls. New companies are doing business with a lot less cost than us.”
Source: Daily Herald
Talks being held about TelEm, UTS merger, TelEm sale halted