AM given ultimatum: shape up or ship out

6 Nov 2007

According to a report carried by Dow Jones yesterday, America Movil (AM) has been given 30 days to fix problems with the network of its Ecuadorian subsidiary Conecel (also known as Porta Celular) or risk having its operating licence cancelled. ‘We have started the process of termination of contract; according to the law the company has 30 days to fix the problems or if it doesn’t the contract will be terminated,’ said head of telecoms regulator Suptel Paul Rojas. The move follows four major network outages in as many weeks.

The Ecuadorian government is reported to have stepped up the pressure on the countries cellcos in recent months, in preparation for discussions on the renewal of wireless concessions which are due to expire next year. The government hopes to increase both the taxes and royalties it receives from the operators. President Rafael Correa has previously said that both Conecel and rival Movistar must accept changes to their concession contracts by the end of this year, or else the government will hold a tender to award new concessions in 2008. Conecel’s concession expires on 28 August 2008, while Movistar’s runs until 29 November 2008.

Ecuador, Claro Ecuador (Conecel)