CaymanNet Business Wednesday
E-BusinessAdvisory Board Accepts Bankers Association Report
The Cayman Islands Bankers' Associationpresented its report on e-commerce to members of the E-BusinessAdvisory Board at a recent board meeting.
The Bankers' Association composed the documentat the boards' request to provide a better understanding of itsoutlook on e-business.
"We're very pleased to be playing arole in helping to shape the infrastructure needed to develope-business in the Cayman Islands. We are and will always be, committedto the development of the financial industry and the economy asa whole," says current Cayman Islands Bankers' AssociationPresident, Eric Crutchley.
Advisory board member and past presidentof the association, Eduardo D'Angelo P. Silva agrees, "It'sgratifying that the board recognises the importance of our participationin a decision-making process that will open new avenues for thedevelopment of the Cayman Islands," Mr. Silva comments.
The report features feedback from bankingprofessionals such as Dave McConney of Cayman National Bank, RoyTatum of the Bank of Butterfield and Mark Whiteside of the BankAustria. Darren Jack of Deloitte and Touche also contributed.
Minister responsible for Information Technology, Hon. LinfordPierson, will review the report later this month
ColombiaTelecom could face liquidation
By OWAIN JOHNSON,
UPI Business Correspondent
CARACAS, Venezuela, (UPI) -- Colombia'sfinance minister warned on Thursday, 6 June that the governmentis considering liquidating state-owned telecommunications providerColombia Telecom.
The company has been badly affected in recentweeks by a combination of employee industrial action and ongoingguerrilla attacks against its infrastructure. Telecom is alsofacing costly legal proceedings by its former international partnerswho are demanding compensation for the disappointing performanceof joint ventures carried out in Colombia in the 1990s.
"If there is no solution and if theunion and the multinationals maintain their intransigent stance,then the company will cease to be viable and we will have to closeit down," Juan Manuel Santos told local radio. The financeminister said it would make more economic sense to liquidate thecompany than to continue maintaining it in its current form, giventhat the partial strike is costing the company around 25 percentof its projected daily revenue, while it also faces a potentiallyruinous bill for compensation from its former partners.
Workers presented a 23-point list of demandsto Telecom management in early May, relating to issues such aspay, redundancies and union recognition. Despite compromise agreementson some of the points, negotiations between the two sides soonbroke down and employees began a campaign of protests.
While the majority of the company's serviceshave not been affected by the protests, the strikers have preventedessential maintenance and upgrading work by blocking technicians'access to key installations. In particular, protesters preventedtechnicians from making alterations to Telecom's system priorto Saturday's number changeover in Colombia, during which an extradigit was added to all cell phone numbers. This created difficultiesfor around 180,000 fixed-line Telecom customers who were unableto call the new cell phone numbers.
The protest action has also prevented techniciansfrom repairing system faults promptly, leading to a number ofshort-term shutdowns in regional services.
Prior to the finance minister's stark warningto both sides Wednesday morning, the industrial dispute appearedto have reached an impasse. The Colombian government has repeatedlycriticized both sides' handling of their differences, and LaborMinister Angelino Garzon last week accused both the board andthe workers of lacking "the political will to resolve thedispute."
Telecom Colombia President Hernan Romanhad insisted that he would not return to the negotiating tableunless employees suspend their protests. Meanwhile, union representativesinsisted the company had reneged on earlier interim accords.
However, Santos' threat to liquidate thecompany unless a solution is found may have created a new andnecessary sense of urgency among the parties to the dispute. Shortlyafter the minister's statement, the president of the SyndicatedTelecom Workers' Union, Rafael Valdovino, said his members werewilling to end their embargo on system repairs and upgrades ifthe board was willing to restart negotiations.
Valdovino described his offer as "amark of goodwill" and expressed his optimism that a negotiatedaccord was possible. The union leader nonetheless warned managementthat some administrative stoppages would continue until a finalagreement was signed.
It remains to be seen whether the minister'sthreat to shut down Telecom altogether will have a similarly salutaryeffect on the international telecommunications companies, whichare pursuing legal claims worth $1.8 billion against the company.
A total of six foreign companies -- Alcatel,Nortel, Ericcson, Siemens, Itochu and NEC -- have filed for damageson the grounds that they participated in joint-venture projectswith the Colombian service provider that proved to be significantlyless profitable than they had been assured. Telecom reached agreementswith the six companies in the early 1990s to install a total of1.6 million fixed telephone lines in the impoverished Andean country.
The agreements included a shared-risk clauseobliging Telecom to make up any difference between the profitlevels it guaranteed the international companies and actual profits.
Colombia's business magazine Semana hasdescribed this arrangement as "possibly the worst deal inhistory" because Telecom drastically exaggerated the profitlevels likely to be generated by the sales and rental of the lines.The company thereby ended up with a huge and unnecessary billwhen results failed to live up to expectations.
The case of Telecom's agreement with Canada'sNortel Networks is illustrative. Under the terms of the 1993 joint-venturecontract, the Canadian company was to install 200,000 fixed telephonelines in exchange for guaranteed profits of $143 million by 1999.This optimistic level of profits never materialized and in lateApril an arbitration court in the Colombian capital Bogota awardedNortel $72 million in compensation. A system designed to provideColombians with telephone lines without the need for huge investmentby a cash-starved state-owned company in fact ended up costingTelecom almost as much as if the company had installed all thelines itself.
Small wonder then that during his campaign,Colombia's now President-elect Alvaro Uribe described Telecomas facing a "delicate" situation.
Uribe's plan is to appoint two well-respectedpublic figures to act as conciliators between the company andits former partners. The conciliators will oversee negotiationsbetween Telecom and its former partners and try to broker a "reasonable"agreement that will not bankrupt the company. The finance minister'sstatement may, though, make the conciliators' job easier by remindingthe international companies that it might be wiser for them tosettle for less than they had hoped rather than risk seeing Telecomliquidated and their debts canceled.