Telefonica pledges to bulk up Movistar investment in Nicaragua

24 May 2012

Cesar Alierta, president of Spanish telecoms giant Telefonica, has pledged to ramp up investments in Movistar’s Nicaraguan unit, Prensa Libre reports. Following the executive’s meeting with Nicaraguan leader Daniel Ortega in Managua, Alierta told reporters: ‘This year Telefonica has accelerated investments in Nicaragua and we continue to accelerate’. Although no concrete figures have been given, the company previously claimed investment of USD100 million between December 2011 and March this year. Leon de la Torre Krais, Spain’s ambassador in Nicaragua, who also participated in the talks with Ortega, described Telefonica as a ‘lever for economic and social growth in the field of technology and communication in Nicaragua, which will increase productivity, growth and social and cultural inclusion of all people’. Ortega readily acknowledged that investment by Spanish companies has a significant positive impact on his country, and assured Alierta that the government will cultivate an environment that encourages future telecoms investments.

According to TeleGeography’s GlobalComms Database, despite strong growth potential Nicaragua’s outmoded telecoms legislation remains a disincentive for international investors, and the wireless sector has remained steadfastly insular since the flawed rollout attempts by newcomers Azteca and Teleglobo around a decade ago. Movistar remains significantly behind its sole wireless rival Claro Movil, which was created from the merger of America Movil units Enitel Movil and Sercom/PCS Digital in September 2006. At 31 March 2012 Movistar had an estimated 2.15 million subscribers, up from around 1.75 million one year earlier, equivalent to a market share of 41.3%. Whilst Claro was granted a 20MHz block of 700MHz spectrum band in April 2011, with a view to trialling Long Term Evolution (LTE) technology, Telefonica has yet to see the privilege reciprocated.
Nicaragua, Movistar Nicaragua