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Ecuador Delays Decision on Mobile-Phone Contract Extensions

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QUITO (Dow Jones) Ecuador has postponed until February its decision on whether to extend contracts for the local units of America Movil and for Spain's Telefonica, national telecommunications secretary Jaime Guerrero said Wednesday.

The concessions for mobile telephone operators, America Movil and Telefonica, expire next year, but there is an option to extend them for another 10 or 15 years.

America Movil operates in Ecuador under the Porta brand and Telefonica with the Movistar brand.

"Up to the start of February we will define if new contracts will be signed with both companies, according to current market conditions," Guerrero told Dow Jones Newswires in an interview.

America Movil's contract ends in August, while Telefonica's contract ends in November.

President Rafael Correa gave until the end of last year to finish negotiations with both companies, but talks got underway only on Dec. 29.

Company officials couldn't be reached for comment.

Guerrero added that Correa's government has the best intentions in working to find an agreement for both sides, but added that if this isn't possible then the government will call for an international bid.

Guerrero also said that government agency Senatel has requested 15 more days to reach a decision on possible sanctions against Porta Celular for alleged negligence regarding a technical problem on Sept. 25.

If the company has fixed the problems, the investigation will end, otherwise its contract could be canceled.

When mobile phone service started in Ecuador in 1993, there were about 60,000 clients.

Last November Ecuador registered 9.81 million clients.

Porta continued to lead the market with 6.75 million, followed by Movistar, with 2.63 million, and locally owned Alegro PCS with 428,868 clients.

-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  rafael correa  alegro  option  porta  telefonica,  Ecuador