Shedding Skin: the new Colombian Telecom

16 Jun 2003

The Colombian government has announced the liquidation of Telecom, Colombia’s state-owned long- distance and local telephony provider. The action is the result of continued operating losses since 1996, as well as alleged mismanagement and inefficiency of Telecom’s subsidiaries. Telecom will emerge as a new company with its assets intact and a skeleton staff (after a lay-off of 5,400 employees) under the Telecom name. The liquidation process will see the company lose 1.3 million active lines forcing an integration of its centrally managed lines with the active lines formerly managed by its subsidiaries. The change was expedited after news of the lay-off led to deterioration in employee relations and subsequent violent protests. Although possibilities of privatisation have been rejected, analysts believe the new Telecom entity will be an attractive target for acquisition.

Colombia