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Ecuador Government Extends Deadline for America Movil Talks

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QUITO (Dow Jones) Ecuador's telecommunications regulator Senatel on Wednesday said it has extended until Jan. 4 the deadline to decide whether Mexican telecommunications company America Movil will continue operating in the Andean country.

"Last Friday, the company submitted 1,122 pages of documentation about its technical problems. We have to analyze carefully all documents," Jaime Guerrero, national telecommunications secretary, told Dow Jones Newswires.

The regulator had given Concecel, America Movil's unit in Ecuador, 30 days from Nov. 5 to fix problems with its network or face the cancelation of its license.

"If the company has remedied its problems, the investigation against it will finish; otherwise the contract will be canceled," Guerrero said.

Guerrero also said that Senatel has already developed a model contract to begin negotiations with the country's two private-sector operators, America Movil and Spain's Telefonica. Their concessions expire in August and November of next year, respectively, and can be extended for up to another 15 years, according to Guerrero.

Until America Movil resolves the investigation, it cannot begin to negotiate a new contract, he said. The government hasn't yet started contract negotiations with Movistar, the Telefonica subsidiary, he said.

Guerrero said the new contracts will impose higher penalties for operational errors.

"Right now, the maximum fine is $200. It's ridiculous. We are thinking about drastic and progressive sanctions that could have a maximum of $2 million, because it is already included in Alegro's contract," Guerrero said.

Alegro is the smallest of Ecuador's three operators, and is controlled by the government. It has around 550,000 customers, while America Movil has 6.6 million users and Telefonica's Movistar has 2.6 million customers.

-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com

(END) Dow Jones Newswires

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Tags: telefonica  america movil  movistar  Ecuador