Former Regulator Head Urges Caution in Mobile Contract Revision

Ecuador's President Rafael Correa ought to move with extra care if he intends to revise mobile concession licenses, according to Juan Carlos Solines, former president of telecoms regulator Conatel, local news site Confirmado reported.

Solines said that the president still might not have all of the legal authority needed to make drastic changes to the concession contracts of mobile carriers Porta, owned by Mexico's América Móvil, and Movistar Ecuador, of Spain's Telefónica, that come up for renewal at the end of 2008.

Correa has said that he will order an investigation to see if they discover any malpractices on the part of the companies. If that is the case, the government could potentially renegotiate some of the contract terms such as the royalties to be paid that were part of the original concession licenses signed in 1993.

While Solines said he identifies with Correa's desire to improve the quality of mobile service in the country, he said that a broad rehash of the contract terms is not the way to go about it because it could negatively impact the entire sector.

As an alternative, Solines suggested that the government specifically target rate reductions by lowering state taxes on mobile usage, meaning savings could then be passed on to users."

Posted to the site on 12th February 2007