“Don’t send UTS to the cemetery”

PHILIPSBURG – “Make sure that you don’t send UTS to the cemetery and let it function as a real private company.” That was the message UTS-director Glen Carty had for members of the central committee on Wednesday afternoon during a discussion about the pending sale of the telecom provider to Liberty Latin America.

The sale of the company is practically a done deal because its major shareholder – the government of Curacao – is ready to ink the deal with Liberty. Curacao holds 87.5 percent of the UTS-shares while St. Maarten owns the remaining 12.5 percent.

Curtis Haynes, member of a committee established to negotiate with potential buyers, said that it is “impossible to make investments based on voice traffic. “The trend is towards a data company, not towards voice services. They do not generate enough revenue anymore. UTS cannot keep up with the fast changing technological environment. We also don’t have the economy of scale; you need a big market to make investments in new technology.” Haynes said that LTE (Long Term Evolution) technology that UTS currently uses gives already a lot of headaches. “We do not want to get into a situation whereby we can no longer provide the services people are demanding.”

Carty said that in the early nineties there was a possibility to sell Landsradio and the Antelecom group; at that time, the companies were valued at 900 million guilders; the sale did not materialize and the value of what is now UTS has dropped to around 300 to 400 million guilders. “And the value keeps dropping,” Carty said.

Over a period of three years, UTS would have to invest 349 million guilders; 107 million of these investments are needed in St. Maarten.

“We have to compete with giants,” Carty said. “The economy in Curacao is fragile; people have no money to top up or to buy our services, so revenue keeps dropping. In 2000 an overseas call cost 18 guilders per minute and what do people pay now for those calls?”

Carty added that roaming charges have also disappeared. “When visitors go to a restaurant they used to ask for the menu first. These days they ask for the Wi-Fi password.”

Carty said that the government must ensure the availability of high quality broadband at a reasonable cost, that it has to keep up with technological developments and that it has to collect its income from licenses and taxes. “A sale of the company will bring in fresh capital.”

Minister de Weever (the shareholder representative for UTS) declined to answer questions about the current value of St. Maarten’s 12.5 percent stake in UTS because this could “damage the deal” with Liberty. From Carty’s presentation however, it appears that this value must be between 37.5 and 50 million guilders ($20.9 to $27.9 million).

Answering questions from MPs, Minister De Weever said that Curacao does not need St. Maarten’s approval to sell its share in UTS. “They are ready to sell on short notice. The sale is opportune for us now because the share value continues to decrease.”

The minister said that Liberty would acquire UTS “with all obligations.” Selling the company is the only option because nobody has shown any interest in a strategic partnership.

UTS employs 58 people in St. Maarten and a condition of the sales and purchase agreement is that there will be no layoffs for the first three years.

How the sale of UTS to Liberty will affect the position of TelEm, remains unclear because the committee meeting continued behind closed doors. MP Ardwell Irion was not optimistic: “A few years from now we’ll be sitting here talking about TelEm.”

Photo caption: UTS St. Maarten MD Glen Carty and UTS CEO Paul de Geus seen here in this screenshot in Parliament during the 20 February 2019 meeting on the sale of UTS.