Puerto Rico Telephone Company
List of Deals
- 1971 $35,000,000 8.10% debentures due December 15, 1996
- 1971 $35,000,000 8.70% debentures due March 15, 1996
Ricotelco, as the Puerto Rico Telephone Company was known, was established in 1914 by Sosthenes and Herman Behn in San Juan, Puerto Rico. It was the first public telephone company established in Puerto Rico. In 1917 Puerto Ricans became U.S. citizens. Sosthenes Behn went on to found ITT (International Telephone & Telegraph) in 1920. ITT was designed as a holding company for the Puerto Rico Telephone Company, the Cuban Telephone Company, and half of the Cuban American Telephone and Telegraph Company. The name ITT was chosen for its similarity to AT&T, the American telecommunications company. For more information about ITT, read the company history for International Standard Electric (ISE).
Sosthenes Behn (1884-1957) was an American colonel in the Spanish-American War and used his multilingual, cosmopolitan allure to business advantage. Behn’s parents were Danish and French; he was born in the Virgin Islands (then a Danish possession, but bought by the United States in 1917); his education took place in Corsica and Paris; his early businesses in sugar trading and telephony were based in Puerto Rico, Cuba, and Spain. Behn’s command of languages and glamour gained him business contracts despite his relative inexperience.
Puerto Rico Telephone Company’s stock was added to the American Stock Exchange in 1955. In the 1960s, 80 percent of the company’s stock was held by ITT. In 1966 Ricotelco had 202,000 phones in service, with 305,000 phones in service by 1970. Revenues were $31.8 million in 1966, rising to $55 million in 1970.
The government of Puerto Rico purchased Ricotelco from ITT for $200 million in 1974. From that point until 1998, the company was run as a nationalized business. GTE purchased the company from the government of Puerto Rico in 1998 for $2.25 billion. GTE was in turn bought in 2000 by Bell Atlantic, now known as Verizon.
Note: There are several books of interest to those studying ISE and ITT. There is a company history of ISE on this website as well as an ISE deal book in the Lehman Collection. Peter Young’s Power of Speech (London: George Allen & Unwin, 1983) catalogues the largest company within ISE, Britain’s STC. A few histories of ITT have been written, most from a critical perspective. Anthony Sampson’s Sovereign State of ITT (New York: Stein and Day, 1973) was a bestseller and a harsh critic of Geneen’s ITT. Robert Sobel’s ITT: The Management of Opportunity (New York: Truman Talley, 1982) was critical and well documented. Thomas S. Burns wrote a harsh criticism in his Tales of ITT: An Insider’s Report (Boston: Houghton Mifflin, 1974). A biography of Geneen appeared: Robert J. Schoenberg’s Geneen (New York: W. W. Norton & Company, 1985). And Rand Araskog, a successor of Geneen’s, wrote an account of how ITT fended off corporate raiders in the 1980s: The ITT Wars (New York: Henry Holt, 1989).