Telefonica Will Invest $400 Million in Ecuador -Chairman
QUITO -(Dow Jones)- Spain's Telefonica plans to invest $400 million in Ecuador in the next years, the company's chairman, Cesar Alierta, said late Thursday after he met with President Rafael Correa in Quito.
Telefonica operates in Ecuador under the Movistar brand.
Alierta didn't give further details, but said the investment is part of the company's plan to expand its services in Ecuador.
Telefonica has invested around $1.2 billion since it began operations in Ecuador in 2004.
Ecuador's national telecommunications agency April 4 said it agreed to extend the concession with Movistar, pending final authorization.
Jaime Guerrero, the nation's telecommunications secretary, told Dow Jones Newswires Friday the final decision about the new contract for the Telefonica unit will be taken by the National Telecommunications Council by April 28.
The new concession will include mobile telephony and 3G services, for a 15-year period.
The current Telefonica's contract was set to expire in November.
Movistar competitor Porta Celular, a unit of Mexico's America Movil, is still negotiating with the government to extend its concession by 15 years.
Last week, Conatel gave Porta Celular until April 28 to submit an acceptable economic plan or face the loss of its concession to operate in Ecuador.
If Porta loses its concession, telecommunications officials will begin a process to revert its assets to the state.
If the state seizes Porta's assets, the company will be reimbursed based on a formula calculated by an Ecuadorean government commission. The commission will value the assets seized at their book value, Guerrero said.
The government and the company have been negotiating since February. Porta's current contract is set to expire in August.
Porta has just over 7.01 million customers, while Movistar has 2.60 million and 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 18th April 2008
