America Movil Continues Negotiating New Contract in Ecuador
QUITO -(Dow Jones)- Porta Celular, the local unit of mobile telephone operator America Movil, continues to want to renew its concession in Ecuador for 15 years, Daniel Bernal, Porta Celular's legal representative, told Dow Jones Newswires Tuesday.
"There are advances in the negotiations, but there are also pending issues. The conversations are progressing. We have a lot of interest in remaining in the country and to extend our contract for 15 years, but there are some pending topics," Bernal said.
On February 18, the National Telecommunications Secretariat known as Senatel gave Porta Celular a new contract model to extend its concession.
A new contract model was also sent to Movistar, a unit of Spain's Telefonica, March 5.
Porta Celular's contract ends in August, while Movistar's contract ends in November.
The Ecuadorean government is said to be seeking to charge Porta and Movistar more than $700 million to renew their concession contracts, but telecommunications authorities haven´t made public the figures for each operator.
According to Senatel sources, the cost for Porta's new concession could be around $450 million, because it is the company with the highest number of clients in Ecuador.
Bernal said that the company has given the information that Senatel has requested and the company has also requested more information about the new contract model, especially how the financial terms, included in the price for the new concession, were defined.
"We are working on contractual, economic and technological issues," Bernal said, without giving more details.
Jaime Guerrero, Senatel's chief, said he hopes to finish the negotiations with Porta Celular by next week and with Movistar during April.
According Guerrero, if it isn't possible to reach an agreement with one or both of the cellular phone operators, the government will apply the law and their assets will go to the state.
"There is a working commission that is looking at how to apply the law and calculate the value of equipment to reimburse the companies if necessary. The amount will be calculated at book value, which is the asset value discounting its depreciation," Guerrero said.
Porta has just over 7.01 million customers, while Movistar has 2.60 million and the state-owned Alegro has 471,576 clients.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 25th March 2008
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