Telefonica settles dispute with government

22 Oct 2009

Spanish telecoms company Telefonica has withdrawn a complaint against the government of Argentina over a tariff freeze implemented during the country’s economic crisis in 2002, Reuters reports citing a Telefonica spokesperson. According to TeleGeography’s GlobalComms database, the government passed a law in 2002 which froze telecoms tariffs and prohibited the indexation of public service levies. In response, Telefonica de Argentina (TdA) filed a complaint with the World Bank’s arbitration tribunal, the International Centre for Settlement of Investment Disputes (ICSID), in 2003. TdA agreed to suspend its lawsuit in October 2006, after the government allowed certain tariffs to be increased and peak hours extended by one hour.

It is understood that the resolution could pave the way for an agreement on pricing; ‘The complaint has been withdrawn and we are trying to move forward with the agreement signed with the Argentine government in 2006 over tariff adjustments,’ the Telefonica spokesman said. Earlier in the year, Telefonica signed a letter of intent with the government offering to make new investments in Argentina in exchange for a commitment to renegotiating prices in the future.

Argentina, Telefonica Argentina (Movistar)