Telefonica units agree to merger conditions; Movistar Peru is born

3 Jun 2005

Telefonica Moviles Peru and Comunicaciones Moviles were legally merged yesterday after parent Telefonica finally agreed to the Ministry of Transport and Communication’s conditions for the tie-up. The new company, which has taken the name Movistar Peru, will be required to return one of the two 25MHz licences that it holds in the 800MHz band within two years. The conditions also require it to expand coverage to 2,000 rural areas and forbid it from changing prices for on-net or off-net calls, until telecoms regulator Osiptel has set definite interconnection costs. Finally, Movistar will lose its concession altogether if, through breaches of free competition rules, it is ordered to pay more than five fines during its concession term or two fines within the space of a single year. The company must also implement number portability according to MTC’s deadline.