World Dialogue on Regulation

America Movil will pay the government of Ecuador around US$ 480 million to renew its mobile concession. The amount is almost US$ 200 million more than last week’s offer from America Movil, which the government rejected.

Jaime Guerrero, the head of Ecuador’s telecommunications regulatory body, said the agreement was reached at a meeting between President Rafael Correa and the America Movil’s Chief Executive Daniel Hajj. Correa is pursuing a program of increasing state control of the economy. The former economy minister has attempted to negotiate with foreign oil and mining companies to improve the terms of their contracts.

"Although it is highly unusual to see a demand this high -- and it sets a precedent for other markets that should put fear into the hearts of operators -- the concept is consistent with standard capitalist economic theory," said Yankee Group analyst Wally Swain.

"America Movil's original response seemed to be based on non-financial factors -- like long-term concerns about Ecuador as a place to do business," Swain added.

The other major mobile operator in Ecuador, Telefonica, already agreed to a new 15 year concession. Together, Telefonica and America Movil’s Porta subsidiary control 95% of Ecuador's mobile market. America Movil and Telefonica are also the two largest mobile operators in Latin America.

Source: Reuters -  WDR/Intelecon Regulatory News.

Bolivian President Evo Morales has announced the nationalization of Bolivia's largest telecommunications operator, Entel.

Morales said his government would take immediate control of the formerly state-owned company, which is 50% owned by Telecom Italia. Morales announced plans to nationalize Entel in 2007, but negotiations with Telecom Italia were still ongoing, until yesterday. On May 1, after Morales’ announcement, police were guarding the Entel offices in La Paz and the eastern city of Santa Cruz. Public Works Minister Oscar Coca said that the government would soon announce the price it would pay Telecom Italia for their shares, and that the transfer would take place within 60 days.

"Basic services -- call them energy, water or communications -- cannot be in the hands of private business. They're public services," Morales said.

Bolivia privatized Entel in 1995. Stet International got 50% of the company in exchange for the Italian company's promise to invest US$ 608 million to upgrade Entel’s networks. Stet then merged with Telecom Italia. Telecom Italia says it has spent more than the promised US$ 608 million to build Bolivia's largest mobile and Internet networks. However, the government says Telecom Italia fell short on the promised investment and owes US$ 25 million in taxes.

Source: The Associated Press - WDR/Intelecon Regulatory News.

At least 109 communities will get a public internet facility this year through the Universal Service Provision Fund.

The Minister of State for Information and Communications, Mallam Ibrahim Dasuki-Nakande, who chairs the Universal Service Provision Fund (USPF) board, said, "We're selecting one community in each of the senatorial districts of the states in the country and one community in the FCT for this phase."

Funso Fayomi, the secretary of the USPF, said, "It will facilitate the provision of infrastructural development to rural and underserved areas in a non-discriminatory manner, promote technological innovation in ICT services delivery, promote competition in ICT services delivery and ensure effective utilization of funds in rural communications investments."

Fayomi added that other support from the USPF includes the establishment of efficient, self-sustaining, market-oriented businesses that would expand ICT access.

Source: Daily Trust - WDR/Intelecon Regulatory News.

The Indian government plans to invite tenders to build 8,000 towers in rural areas. The networks would receive financing from the Universal Service Obligation Fund.

Communication and IT Minister A Raja said that around 35% of India’s geographic area is not covered by mobile service. Raja added that out of nearly 560,000 villages, more than 540,000 have been supplied with public phones and the remaining villages would be covered soon.

In addition to installing 8,000 towers in rural areas in the current financial year, the Department of Telecom (DoT) wants to establish an additional 11,000 towers next year.

Source: The Press Trust of India Limited - WDR/Intelecon Regulatory News.

Telekom Malaysia (TM) is in discussions with the government on details of the US$ 4.8 billion high-speed broadband (HSBB) project.

“We’re still in discussion with the government on the final details (of the HSBB plan), the rollout plan, whether we will scale down the project,” TM chairman Tan Sri Md Radzi Mansor said.

The HSBB project, announced in September 2007, is to be implemented over ten years. It is part of the government’s plan to achieve their goal of 50% household broadband penetration by 2010.

Credit analysts are waiting for the final details on the HSBB project to determine whether any adjustments should be made to TM’s credit rating due to its commitment to the project. The final details of the project will also influence the valuation of TM after spinning off its international and domestic mobile assets. The four main aspects of the project are the last mile, the core network, international connectivity and the core content platform.

Based on previous indications about the project, TM is expected to invest US$ 3.3 billion over 10 years while the government will contribute US$ 1.5 billion. HSBB coverage is expected to be available across 2.2 million premises within the next three years.

Source: The Edge Financial Daily - WDR/Intelecon Regulatory News.

<sup>The National Telecommunications Commission (NTC), in a new circular, is advocating the elimination of interconnection fees between wireless local loop (WLL) operators.

In its draft WLL rules, the NTC supports free interconnection for calls originating from or terminating with WLL subscribers of already interconnected local exchange carriers within a local calling area.

The NTC circular recommends that WLL equipment registered within a local calling area should not be used outside its local area. The regulator said WLL calls made from one local calling area to another would be considered national long-distance calls and should be levied interconnection access charge.

Several Philippine local operators offer WLL services. Bayan Telecommunications offers its WLL in and around Metro Manila. It has around 125,000 WLL subscribers, with annual growth expected to be around ten to fifteen percent over the next two years. Philippine Long Distance Telephone, Digital Telecommunications Philippines and Globe Telecom also offer WLL services.</sup>

Source: The Manila Times - WDR/Intelecon Regulatory News.

Peru’s Ministerio de Transportes y Comunicaciones (MTC) has requested that Osiptel, the telecommunications regulator, approve the abolition of long distance charges for domestic mobile-to-mobile calls.

The elimination of long distance charges is now possible because on April 5 the MTC introduced extra digits for all mobile phone numbers, bringing the total to nine digits. Mobile numbers in Lima had been eight digits, while numbers in other parts of Peru were seven digits.

Around 75% of mobile-to-mobile long distance calls are already charged as local calls due largely to promotions by mobile operators. Eliminating long distance charges is not expected to be complicated, Movistar representative Elizabeth Galdo said. MTC plans to have the long-distance free scheme in place in 2009.

The extra digits for mobile numbers also enable number portability, which is expected to be implemented in 2010, communications undersecretary Cayetana Aljovin said.

Source: Business News Americas - WDR/Intelecon Regulatory News.

TOT and CAT Telecom could be required to pay a 4% universal service levy if they do not make faster progress in rolling out telecommunications services in rural areas.

Suranan Wongvithayakamjorn, secretary-general of the National Telecommunications Commission (NTC), said that both state-owned operators have requested more time to meet their roll-out obligations. TOT says that the slow process of procuring telecom equipment is responsible for its failure.

Both operators agreed to provide service in unserved rural areas in lieu of contributing to the universal service obligation (USO) fund. In Thailand, if operators do not want to provide service in unserved areas, they are required to pay 4% of their revenue into the fund to finance operators interested in serving remote, rural areas.

The NTC has requested more information from TOT and CAT by April 22. If they fail to provide convincing reasons for failing to meet their roll-out obligations, the NTC could order them to contribute 4% of their revenues to the USO fund.

TOT has struggled financially in part because it lost around US$ 446 million in revenue when Total Access Communication (DTAC) and True Move stopped paying an access charge to TOT in November 2006. TOT sued the mobile operators for the overdue payments. The access charge is paid by the three mobile operators on CAT concessions to TOT for connecting their calls to other networks.

More financial difficulties face TOT after an arbitration panel recently ruled that the company has to pay US$ 759 million to TT&T for letting mobile operators use TT&T's network. TOT plans to appeal the decision.

Source: Thai News Service - WDR/Intelecon Regulatory News.