America Movil to lose licence, says report

30 Apr 2008

Reuters reports that Ecuador’s government has refused to renew the operating licence of America Movil’s (AM) local mobile unit Conecel (Porta) after rejecting the Mexican-owned cellco’s third and final offer of terms. Negotiations between the government and AM have been ongoing since February, and Porta’s licence expires in August. Its smaller rival Movistar Ecuador, a unit of Spain’s Telefonica, agreed to pay USD220 million for a new 15-year 2G/3G licence earlier this month, and Ecuador’s President Rafael Correa has said the two contracts should be worth a combined USD700 million, indicating he was looking for AM to offer up to USD480 million. Correa previously told AM that if it failed to raise its terms to a sufficient level he would launch an international auction for its concession. Jaime Guerrero, head of the country’s telecoms regulator Senatel, confirmed to Reuters that ‘we did not reach an agreement,’ although financial details of AM’s offer were not revealed. Guerrero added that the government would now ‘gradually take over the company’s concession,’ and in a later statement state officials told the operator’s customers that services would not be disrupted.

According to TeleGeography’s GlobalComms database, Conecel had 6.94 million mobile subscribers at the end of 2007. Although 3G licences have not been formally awarded in Ecuador, the cellco has pressed ahead with its next generation ambitions, launching W-CDMA-based services under the banner GSM Turbo 3G in August 2007; the service covered parts of Quito & Guayaquil by the end of the year.