PHILIPSBURG—The financial status of TelEm Group of Companies is deemed confidential and not for public consumption.
Members of Parliament (MPs) sat in a Central Committee meeting on Friday, November 6, to get an update on the financial status of TelEm Group of Companies. Prime Minister Silveria Jacobs, representing the shareholder of the company on behalf of the Council of Ministers, formally requested that the presentation regarding the company’s financial status be held in a closed-door meeting, as the information was of a sensitive nature and deemed “not necessarily for public consumption at this time.”
TelEm Group Chief Financial Officer (CFO) Helma Etnel explained in her opening remarks that the company intended to be transparent with parliament and in doing so would convey confidential information, and as it is in competition, certain information should remain behind closed doors.
This request was granted by the Central Committee and the public meeting was adjourned to allow this to take place.
In continuation of the meeting in the public forum, TelEm Group Chief Executive Officer (CEO) Kendall Dupersoy gave MPs a brief presentation on the operations of TelEm Group. During his presentation he spoke on three key areas: the Fiber to the Home Project, the resiliency of the company, and the mobile infrastructure.
Dupersoy said the fibre project is the saving grace of the company. A total of 2,561 TelEm Group customers are currently installed on the fibre system. He said 773 of the installations had been completed by a previous contractor and 894 by the current contractor.
The current bottleneck for the company is the Internet service provider (ISP). TelEm Group is working on laying cable, with Philipsburg being ready to start ISP. He noted that the project may take about two to 2½ years to complete.
TelEm Group decided in 2017 to make the network and its building more resilient. Dupersoy said that in doing so all central offices and equipment rooms have been reduced to a smaller size, to an investment of US $1,000,000. Also, all roofs have been changed to concrete. He said the company is aiming to have all infrastructure underground. At the moment 70 per cent is underground, leaving another 30 per cent to be completed.
According to Dupersoy, the St. Maarten Puerto Rico Network One SMPR-1 cable has not been repaired since it was damaged in 2016. TelEm Group is working on restoring this primary route.
The company has purchased a secondary route, and indefeasible right of use (IRU). He said a certain amount of bandwidth is bought from a cable. This was bought through Saba, Statia Cable System (SSCS) connecting the company from St. Maarten to St. Kitts and then to the United States (US). He estimated the purchase to be about $3 million for about 15 years. He noted that TelEm Group is considering a third route.
Dupersoy briefly shared the company’s plans for the mobile network and investments to be made.
After the passing of Hurricane Irma in 2017 the company lost some of its towers, from which he said the company had learnt. The company plans to reinforce the structures of about 25 towers for a total of $625,000. Generators and tanks will be added to all sites, allowing them to run continuously for at least a week. This will be an investment of $629,000. The company will invest in battery backups that last at least eight hours in the event electricity in not available, to a sum of $2,000.
TelEm Group will upgrade its headquarters (main office) with a second generator and a larger fuel tank for $300,000, and add backhaul to the coal network for redundancy, to an investment of $400,000. The company plans to invest in four Cell on Wheels (COW) to a tune of $500,000. Additional investments will be made by the company. Dupersoy estimated that the total investment will amount to $2,925,720.
He said if the company were to work together with GEBE for the underground plant, that would amount to an investment of $3,394,934. A submarine cable will total $3,935,000 and TelEm Mobile network reinforcement of government emergency services will amount to an investment of $2,925,720.
MP Grisha Heyliger-Marten questioned TelEm management on the status of the forensic audit. According to the Dupersoy, the company was informed by auditors that a forensic audit requires a “trigger”. He said that after completing a standard audit, if the auditors have seen something questionable the audit will go deeper into that area. This would require a forensic audit. He explained that this is why the company opted for an operation audit.
MP Heyliger-Marten asked why TelEm Group had not purchased Dauphin Telecom. Dupersoy explained that although this was not in his time, he understands that buying this company would have cost between $17 and $21 million on top of inheriting the company’s debt of around $8 million.
MP Claudius Buncamper posed several critical questions to the shareholders concerning the TelEm Group board of directors.
He said that in accordance to Article 12, sub one of the articles of incorporation, the board is to have a minimum of five and maximum of seven members, yet the present board sitting at TelEm has three members and is functioning as though nothing is wrong. “Based on the indications, only three board members signed off on a resolution dated October 5 to dismiss the chairman of the board. Is this correct and is this legal?” he asked.
He said the board had fired two members in the past few months, one he said for fraud and nepotism and the other for exposing TelEm’s management.
Buncamper continued by saying that during this time the shareholder has not taken an active position in ensuring that either the managing board or the supervisory board will present members for the board, or when they plan on doing so. “I hope the shareholder asks this board to go home and put a new board there of competent people,” he stated.
He further questioned the position of the current CFO. “It is common knowledge that the CFO of TelEm is on the supervisory board of Princess Juliana International Airport (PJIA). Why is this allowed?” he asked. Buncamper said a resolution had been made by the board of TelEm which stated that the board had no objections to this.
“It has come to my attention … that one of the supervisory board of directors members of TelEm has just gotten a concession at the PJIA while the CFO was a member of that board,” stated Buncamper. He went on to say that if that was indeed true, the CFO of TelEm should resign from the board. “Because if that’s not nepotism, and if that's not a conflict of interest then I don’t know what is,” exclaimed the MP.
MP Angelique Romou brought to attention that there remain a great number of students who are attending online classes. She asked TelEm management to provide an update on what have been the latest commitments to schools, especially to the public schools, as it pertains to connectivity and bandwidth.
In response, Dupersoy said that based on the expertise of the company, he thinks the 50 megabytes initially set up for public schools would be sufficient, but an assessment of this will be carried out by the company.
He said this service was provided to schools free of charge and that TelEm is busy assisting the schools with re-wiring and getting the schools up to par. Most schools are connected to the fibre infrastructure.
TelEm Group management could not answer all of the questions posed by MPs during the meeting and therefore requested to provide the answers in writing.
The meeting was adjourned and will continue at a later date when Jacobs will return to answer the questions posed by the MPs to the shareholder of the company.
