The Ministry of Transport and Communications (MTC) in Peru has refuted claims that it is considering a proposal by Telefonica Moviles (TEM) to alter the terms of permission for its merger with BellSouth’s former local subsidiary, now known as Communicaciones Moviles. Among restrictions imposed by the regulator, TEM is required to return one of the 25MHz licenses that each operator holds in the 800MHz band within two years. The operator is also forbidden from varying its rates for on-net or off-net calls, until telecoms regulator Osiptel has made a final decision on this matter, and has set definite interconnection costs. The MTC also asked Comunicaciones Móviles to expand its coverage to 2,000 rural areas that currently have no mobile coverage or a deficient service at best. The operator will not be able to use the government’s telecoms fund Fitel and if it fails to meet these requirements, faces a fine of up to USD49,000.