Government offers Telecom Italia USD100m for Entel stake

6 May 2008

Bolivia’s government has offered up to USD100 million for the 50.9% of telecoms operator Entel owned by Telecom Italia subsidiary Euro Telecom Internacional (ETI), writes BNamericas. The value of the shares is estimated by the government at between USD75 million and USD100 million, with a final figure expected to be made known within 60 days. Bolivia’s minister to the presidency, Juan Ramon Quintana, was quoted as saying ‘We have constituted a trust fund to pay for the shares that this company [ETI] had in Entel. We will not pay the market price, but the book value, which is the real cost of these shares.’ Bolivia’s government has been trying to negotiate the purchase of ETI’s stake in Entel since 2006 but rejected ETI’s asking price of USD170 million, newspaper Correo del Sur reported.

Elmer Catarina, Bolivia’s ambassador to Italy, was reported by La Prensa as having explained to the Italian government and Italian business community that the move was not ‘expropriation’ but a message from the government that there was not transparency during ETI’s tenancy of Entel. The government has attempted to justify its intention to take control of Entel by saying that ETI failed to fulfil investment plans or meet quality of service commitments in rural areas, and has also accused the company of tax evasion. Telecom Italia has not yet commented on the latest turn of events.