Infrastructure blow for Claro and Movistar in Colombia

29 Aug 2013

The Constitutional Court in Colombia has affirmed that cellular operators Claro and Movistar must hand over all their telecoms infrastructure in the country once their concessions expire in March next year. The two firms had thought that the expiry of the licences meant that only their spectrum would have to be returned, but the Court has upheld an earlier decision by the State Comptroller which ruled that all network equipment would have to be included. It is estimated that the pair have invested over USD3.6 billion in their Colombian operations to date.

Six companies were licensed to begin operating in Colombia in 1994 using equipment inherited from the former public monopoly, and these six have subsequently been reduced to just two firms, America Movil’s Claro and the Telefonica subsidiary Movistar, via a series of mergers and acquisitions. Under the 1994 licences they agreed to return their assets to the state once the concession period had ended; the original ten-year permits were renewed for a further ten years in 2004, but the state is now looking to take control of the assets next March and lease infrastructure back to all operators in the country to create a more level playing field. It now appears that Claro and Movistar must acquire new spectrum licences and sign wholesale infrastructure deals if they wish to continue offering services from next year. Both firms won 4G spectrum in a government auction earlier this year.

It has been confirmed, meanwhile, that rival cellcos Tigo and Une-EPM are under no obligation to return their own infrastructure to the government as they were licensed later and have built their networks from scratch.