Argentina Salta Province Court Bans Mobile Phone Line Sales

BUENOS AIRES -(Dow Jones)- A federal judge in the northwest province of Salta has prohibited all three of the country's wireless operators from selling new cellular lines, citing the companies for insufficient service.

Cicomra, Argentina's telecommunications industry group, confirmed in a Monday press statement that the companies in question have been notified of the Salta court decision. The judge's ruling halts sales by Personal, the mobile unit of Telecom Argentina (TEO); CTI Movil, which belongs to Mexican operator America Movil (AMX); and Movistar, the company launched in April from Spanish concern Telefonica Moviles' (TEM) acquisition of BellSouth Corp's (BLS) Latin American assets.

According to a report by state news agency Telam, Salta has 300,000 cellular phone users. The court ruling allows the companies' stores in the province to stay open to handle current clients' service problems and sell handsets that don't come with a new line.

Cicomra emphasized that the companies have already invested $300 million this year out of a total planned $500 million. The industry group also said inadequate regulation is complicating expansion plans and said it "reiterates the necessity of making different norms compatible with each other to permit the development of this infrastructure."

Mobile phone providers face intense competition to expand their networks and capture new users. The companies have also attracted substantial ire from users that say coverage is inadequate even within Buenos Aires city.

Complaints about the wireless operators routinely top the government's consumer watchdog agency's toll-free hotline. In December, the government banned CTI Movil from running two promotions that officials deemed false advertising. One of those campaigns claimed that the company had 100% coverage in Argentina.

-By Wailin Wong, Dow Jones Newswires; 5411-4311-3125; wailin.wong@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 8th August 2005