Movistar clashes with MTC over renewal of two fixed line licences

30 Nov 2018

Spanish-owned full-service provider Movistar has been denied an extension to two of its fixed telephony licences due to the rate of infractions committed by the company during the licence period, Gestion reports. The Ministry of Transport and Communications (Ministerio de Transportes y Comunicaciones, MTC) denied the extension of two licences that were initially issued in 1994, have already been renewed three times, and are now due to expire in November 2027 on the basis that the telco had been the subject of ‘firm sanctions’ more than 1,300 times by the regulator between 1 January 2009 and 1 January 2014 – 777 of which related to sector-specific regulations and 585 to Peruvian laws.

Movistar’s regulatory director Mario Coronado assured customers that the decision would not affect the company’s ability to provide continuity of services nationwide. However, the official went on to say that the company disagrees with MTC’s ruling as it does not consider Movistar’s investments and ‘contribution to the development of telecommunications in the country’ which he described as ‘unprecedented at the international level’. Movistar also expressed its concern that the decision indicated a ‘lack of predictability’ in the regulation of the market and suggested that it may reconsider its spending on infrastructure as a result.

Responding to Movistar’s public comments, Vice Minister of Communications Virginia Nakagawa told the paper that there had been no changes to the rules regarding the renewal of contracts, saying that the methodology used had been set in place in 2010 and had not been challenged. The official also pointed out that the method was used the last time the concession in questions were renewed – as well as for renewals for other concessions held by Telefonica and its rivals – and that none of those previous decisions had been challenged.