Movilnet to be included in nationalisation; ‘expropriation’ re-enters dictionary

30 Jan 2007

Venezuela’s telecoms regulator Conatel has rejected recommendations by industry analysts that the government should separate CANTV from its mobile unit Movilnet in the event of a plan to re-nationalise the incumbent telco going ahead. Experts have claimed that nationalisation could destabilise the country’s mobile market because of an injection of state subsidies for Movilnet’s operations. However, Jesse Chacón, Telecommunications Minister and Director General of Conatel, remains adamant that Movilnet should fall under state control, and claims that Conatel would use the mobile operator’s profits to expand network coverage in the south of the country. Additionally, Chacón has told reporters that, while the government will seek to reach an agreement to buy out CANTV’s current shareholders, it reserves the right to expropriate the company if such an agreement cannot be reached. The minister’s statements contradict previous assurances from state finance chief Ricardo Sanguino, who claimed that expropriation was a ‘banned word in our dictionary’. US telco Verizon’s deal to sell its 28.5% stake in CANTV to Mexican sister companies America Mòvil and Telmex looks almost certain not to be completed.

Venezuela, CANTV, Movilnet