Movilnet says becoming ILD operator to combat grey market this quarter

10 Feb 2017

Venezuelan state-owned mobile operator Movilnet – a division of fixed line incumbent CANTV – has announced that it will join its parent telco in directly operating international long-distance (ILD) telephony services in the first quarter of 2017, following permission from the National Telecommunications Commission (Conatel), TeleSemana reports. Movilnet announced that the move is motivated by the need to combat the ‘grey traffic’ unlicensed international calling market that has expanded recently due to the knock-on effects of Venezuela’s currency crisis on the country’s telecoms operators; the government-backed company added that the service will attract foreign exchange to benefit the country and invest in the telecoms sector. The cellco stated that its strategy will be ‘to offer more attractive rates and higher quality of service’ in order to combat the illegal international voice business.

Recall that in H1 2016 Movilnet’s cellular rivals, domestically-owned Digitel and Telefonica subsidiary Movistar Venezuela, suspended ILD calling (and international mobile roaming) to most destinations due to the inability to obtain foreign currency to pay overseas telecoms partners, whilst today this pair and CANTV only offer ILD calls to a few selected global destinations. The currency shortage was exacerbated by a government policy to adopt a ‘complimentary currencies’ exchange rate, which had the knock-on effect of forcing operators to alter prices for international services, in most cases to unaffordable levels.

TeleSemana’s report notes that it remains to be seen how Movilnet will be able to negotiate more favourable international traffic agreements with foreign telco peers in order to offer cheaper rates than CANTV, Movistar or Digitel.

Venezuela, CANTV, Movilnet, National Telecommunications Commission (Conatel)