BOGOTA -(Dow Jones)- Colombia has chosen Telefonos de Mexico, or Telmex (TMX), to take over operations at Colombia Telecomunicaciones, the Andean nation's official press agency SNE said in a statement.
"The government will reveal over the course of the week the accord it has reached with Telmex," the SNE said late Sunday.
The memorandum of understanding will be published in no more than five working days.
Colombia Telecomunicaciones wanted an international partner to help it break into the mobile business, where growth is pinching the local fixed-line market.
Spain's Telefonica SA (TEF) was also bidding to take over the management of Colombia Telecomunicaciones.
Telmex will now secure a management fee based on the company's operating revenues.
For Telecomunicaciones, a strategic partner should help it generate higher revenues to comply with costly pension liabilities. Telecomunicaciones has to pay some 5.9 trillion pesos ($1=COP2,306.00) to more than 16,000 retirees.
"The strategic alliance aims (to ensure) that Colombia Telecomunicaciones and the liquidated Telecom have the necessary resources to comply with liabilities payments, especially pension (payments)," the SNE said in its statement.
In 2003, when the government liquidated its debt-ridden Telecom company, cutting permanent employees to 2,000 from 10,500 and creating Colombia Telecomunicaciones.
-By Diana Delgado, Dow Jones Newswires; 571-600-1980; colombia@dowjones.com
(END) Dow Jones Newswires"
Posted to the site on 22nd August 2005
Posted to: www.cellular-news.com/story/13822.php