Honduras, the second poorest country in Central America, suffers from extraordinarily unequal distribution of income, as well as high underemployment. While historically dependent on the export of bananas and coffee, Honduras has diversified its export base to include apparel and automobile wire harnessing. As a consequence, the internet has been slow to develop in Honduras: DSL and cable modem technologies are available but are relatively expensive and thus take-up has been low thus far. Higher speed services are largely restricted to the major urban centres. Nevertheless, the demand for broadband is steadily increasing.
The Internet penetration rate was 38% by the end of 2017. Among the poorest countries in Central America, Honduras has long been plagued by an unstable political framework which has rendered telecom sector reform difficult.
Although Internet connectivity is hampered by many problems, the sector of mobile services is thriving thanks to competition supported by international investment. As a result, mobile penetration is about 20% above the regional average. Revenue growth from the mobile sector looks promising in coming years as operators invest in their networks, expand their reach and upgrade their capabilities to accommodate mobile broadband services. Mobile data as a proportion of overall mobile revenue has increased steadily, though low-end SMS services will continue to account for the bulk of data revenue for some years. Recent political conflicts, however, have not facilitated the much-needed reform of legislation governing the telecoms sector.
Honduras’s economy depends heavily on US trade and remittances. The US-Central America-Dominican Republic Free Trade Agreement came into force in 2006 and has helped foster foreign direct investment, but physical and political insecurity, as well as crime and perceptions of corruption, may deter potential investors; about 15% of foreign direct investment is from US firms.
The economy registered modest economic growth of 3.1%-4.0% from 2010 to 2017, insufficient to improve living standards for the nearly 65% of the population in poverty. In 2017, Honduras faced rising public debt, but its economy has performed better than expected due to low oil prices and improved investor confidence. Honduras signed a three-year standby arrangement with the IMF in December 2014, aimed at easing Honduras’s poor fiscal position.
Hondutel (Empresa Hondureña de Telecomunicaciones), is the Honduras government’s telecommunications company. It has a monopoly on international calls. The organization was created in 1976 as an autonomous organization responsible for the moderization of Honduras’ telecommunication system, and to achieve a better efficiency in its administration and profitability. Hondutel was historically administered by Honduras’ armed forces as telecommunications were considered a matter of national security. In 2003, the government approved the sale of Hondutel’s B band network, acquired by Megatel. In 2004, it is bought back by América Móvil, owner of Telmex. Currently, it offers mobile phone coverage in the cities of Tegucigalpa, San Pedro Sula, La Ceiba, Olancho, Progress and Copan and surrounding areas.
(None reported as of June 2018)