IFC confirms Viettel taking 60% in new Haitian telco, investing USD99m

4 May 2010

The International Finance Corporation (IFC), a member of the World Bank Group, has issued a press release confirming that Haiti’s government and central bank (Banque de la Republique d’Haiti – BRH) have signed an agreement giving Vietnamese mobile, fixed line and broadband operator Viettel a 60% stake in a new national PSTN operator and mobile licensee, in return for an investment package of USD99 million to expand telecoms infrastructure including building a fibre-optic cable network. Under a public-private partnership (PPP) structured by the IFC, state-owned incumbent Telecommunications d’Haiti (Teleco) will effectively be folded into a newly created telco possessing licences and frequencies for a full range of telecoms services including wireline, fixed-wireless, international submarine cable, WiMAX-based wireless broadband and cellular. Via a capital injection, Viettel will hold 60% of the new company with the remainder staying in state hands. Viettel has agreed to initially invest USD59 million, and an additional USD40 million over four years, to upgrade Teleco’s existing services, badly in need of renovation and upgrading even before the devastating earthquake in January. According to previous reports Viettel would also inherit Teleco’s outstanding debts to the BRH, estimated at over USD30 million; at the beginning of this year the national PTO was only remaining operational via a monthly injection of around USD1.5 million from the national bank.

The IFC served as the advisor to the Haitian government in structuring the international bidding process for the PPP, which is expected to result in a significant contribution to the country’s recovery by rebuilding infrastructure and increasing access to fixed, mobile and high speed internet services. The earthquake caused significant damage to Teleco’s and other local providers’ networks. Lars Thunell, IFC Executive Vice President and CEO, noted: ‘Economic growth is easier to achieve when people have the basic tools they need to communicate and connect with the world.’ Charles Castel, Governor of the BRH, said: ‘Enhancing telecommunications infrastructure at this time is an essential component of Haiti’s reconstruction efforts … We welcome Viettel’s commitment which shows confidence in Haiti and sends a signal to other potential private investors who want to support the country’s recovery and development.’

In January 2010 it was revealed that Haiti’s Council of Modernisation of Public Enterprises (CMEP) deemed the Vietnamese technical bid to be the most suitable for Teleco, whilst rejecting two shortlisted bids from Haitian GSM network operators Digicel Haiti, backed by Jamaica-based Digicel Group, and Comcel (Voila), owned by US-based Trilogy International Partners. A special bid evaluation committee of CMEP announced Viettel as the sole qualified bidder on 30 December 2009 following a process which began the previous June. An attempt by Viettel to negotiate a larger stake – 70% – was apparently turned down. Viettel’s investment proposals for Haiti include installing a 2,000km fibre-optic network to extend broadband internet access to provincial towns, whilst it will be looking at plans to develop the newly created telco’s dormant 2G/3G mobile assets, and also aiming to return the operator to profitability within three years. Viettel, owned by Vietnam’s defence ministry, has already expanded its telecoms operations to Cambodia and Laos, and it was recently rumoured to be preparing a bid for Bangladeshi cellco Teletalk.

Haiti, Natcom, Rectel, Viettel Telecom