Quite some options but no solution yet for half-empty TelEm-building

PHILIPSBURG — Offices in the TelEm building on Pond Island are currently unused due to layoffs and staff reductions and the debate about what to do with it is raging on social media. One thing is for sure: the building belongs to the company and not to the government. So selling the property to government and housing the telecom provider elsewhere does sound like a viable option though.

Suggestions on social media range from, indeed, selling the building and use the proceeds to improve the company’s financial situation, to using it as an alternative for the current parliament building and renting the empty space out to third parties to generate revenue.

The question is of course how TelEm ended up in this situation in the first place. There are a couple of (unconfirmed) explanations for it.

The rumor mill suggests that it is all due to mismanagement but that cannot be true. The company was subjected to an operational audit and that exercise did not find anything close to serious mismanagement.

Technological developments shook the telecom business since 2015 and TelEm was admittedly slow to react. How come? The supervisory board blocked efforts to make the necessary changes and management’s efforts at the introduction of automation suffered the same fate.

Using the building on Pond Island as the new parliament building is an option that is still on the table, or so we hear. Its rental revenue could help TelEm maintain the building and improve its financial position.

One of the criticisms circulating through the community is that TelEm blundered with the acquisition of Cable TV. The truth is that this acquisition was strategic and mainly focused on Cable TV’s underground network. That the planners did not use the network effectively is another story.

A recent court ruling about the dispute between TelEm and the Israeli telecom giant MER about the construction of a fiber optic network threw yet another spanner in the works. Did TelEm mishandle the project? No, it didn’t. The real problem here was that MER failed to execute it properly. This increased cost and left TelEm with a claim of around $3 million, after a court ruled that there were no valid grounds to terminate the contract.

Back in 2021 TelEm management advised the board to sell the top two floors of its Smitcoms 2 building to the Dutch government for $3 million dollars, but the board(*) refused.

As a result of all this, the top two floors of the building are now standing empty and they do not generate any rental revenue. Management has proposed the idea for parliament to use the Telem building but so far this has not become a reality. That is odd, because TelEm does not need the space and it could easily move its operations to the Earth Station building and Smitcoms 2 building’s two upper floors that used to house the Governor’s Cabinet.

This does not even tell the whole story, because on social media other ideas are circulating as well. For instance: use the empty space to house the Tourism Bureau, or offices of utilities company GEBE. However, the Tourist Bureau is currently centrally located and easily accessible for tourists. Someone raised the question how much of the current Tourist Bureau offices is actually used. So that is another question to be answered.

Given TelEm’s current predicament – paying off the $3 million claim to MER – there are actually quite some potential solutions. The question remains who is willing and able to step up to the plate and take a decision that will benefit all parties.

(*) Rectification: In a previous version we erroneously named a particular board member as the chair the board of TelEm. The previously mentioned board member has never been chairman nor vice-chairman of the TelEm board. We apologize for the incorrect statement.

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TelEm loses appeal against Israeli telecom giant

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