Venezuela Regulator To Rule On CANTV's Digitel Bid End 1Q

CARACAS -(Dow Jones)- Venezuela's telecommunications regulator, Conatel, intends to make a decision early next year on a $450 million acquisition of Venezuela's number three telecom, Digitel, by C.A. Nacional Telefonos de Venezuela (VNT), or CANTV, the country's top carrier.

Conatel could approve the acquisition at the end of the first quarter or beginning of the second, Alvin Lezama, director of Conatel, told reporters Tuesday.

The decision, he said, is a complex one because it involves the country's largest telecom operator and the acquisition would further consolidate its dominance in the market.

"We've been analyzing this for two months now and it's a complicated process," Lezama said. He noted that making a decision on this acquisition will be more challenging than approving Telefonica Moviles' (TEM) acquisition of BellSouth Corp's (BLS) assets earlier this year.

It took Conatel four months to approve the Telefonica purchase, he noted.

Last month, CANTV announced it would seek to acquire Digitel from Italy's Telecom Italia Mobile SpA (TIM.MI) in a $450 million deal. CANTV is expected to have 3.9 million subscribers once the deal is sealed.

Some observers have argued that CANTV and Digitel must have received some approval signal from the government before announcing the transaction, but regulators dismiss such talk.

"They never consulted on this deal officially or unofficially," Franco Silva, chief of Conatel operations, told Dow Jones Newswires. Silva said this deal is complex because it will potentially impact the mobile and fixed-line systems. Digitel has also added a number of new products to the market and regulators want to keep those benefits for consumers, he said.

-By Raul Gallegos, Dow Jones Newswires; 58-212-564-1339; raul.gallegos@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 21st December 2004