Guatemalan Telephone Company Sold

Centr-Am News, Vol.XXVIII, week of September 20–October 3, 1998

The Guatemalan government completed the sale of 75 per cent of the shares in the formerly government-run telephone company, Telgua, to Luca, S.A., a Guatemalan-Central American group, on October 1. Telgua was sold for $700,156,000.30.

The leftist New Guatemala Democratic Front (FDNG), the third largest political party in Guatemala, announced on October 2 that it will challenge the sale, saying the process was not "transparent." They questioned what they called "irregularities, the speed and the extreme secrecy" of the sale. They found suspicious that Luca, S.A. was the only bidder, and that the decision to sell the company to Luca, S.A. was made by the deciding commission in only 30 minutes, according to FDNG Secretary General Rafael Arriaga.

The FDNG's suspicions are backed by the conservative Guatemalan Republican Front, said that party's secretary general Juan Francisco Reyes. The objections include the fact that Luca, S.A. has no telecommunications experience and currently has no one on staff to supervise Telgua's operation. Members of the opposition have also asserted that public officials and relatives of Arzu are shareholders Luca, S.A.

Objections by the opposition to the manner is which the company was sold were called by President Alvaro Arzu "calumny." Arzu insisted that the process was "crystaline," and emphasized that the sale would benefit above all the rural areas of Guatemala.

The sudden sale of Telgua apparently came as a surprise to many. The bidding ceremony was announced by Alfredo Guzman only 14 hours before Telgua was sold to Luca, S.A.

Luca, S.A. president Ricardo Bueso explained that the company is made up of 16 majority and a number of minority partners. Twelve of them, making up 75%, are Guatemalan, four are from Honduras. He did not specify who were the remaining partners.

The sale follows a previous unsuccessful attempt last September, when the government considered the offers for Telgua "too low."
(Prensa Libre, Guatemala City, 10/2, 3/98)