Ecuador approves reform of Telecommunications Law

23 Jul 2021

Ecuador’s president Guillermo Lasso has signed Decree 126 reforming the country’s Organic Telecommunications Law, in force since February 2015. The 18 articles of the reform package aim to prioritise connectivity and efforts to reduce the digital divide, particularly in rural areas, rather than maximise tax revenues.

In addition to capping the total regulatory obligations paid by operators at 2.5% of total revenues, the decree notably applies a narrower definition of their ‘total income invoiced and received’, discounting items such as income from the sale of handsets, SIM cards and assets not assigned to the concession, which should translate into a reduction in their total regulatory obligations. After the latest reform, a telco’s annual investment plan may also count towards their universal service obligation (currently 1% of annual revenue), while spectrum tenders are expected to focus on maximising coverage rather than government revenues.

In an interview with Digital Policy Law, Jorge Cevallos, president of the telecom operators association Asetel, welcomed the reforms, which he believes will ‘contribute to providing legal certainty and regulatory predictability’. ‘We consider this to be an important step in moving from a model predominantly based on tax collection to a new development model focused on connectivity and closing the digital divide,’ he said, adding: ‘It shows a serious commitment on the part of the authorities to connect unserved areas. It is a step in the right direction, not only because of the reform itself, but because of the clear message of where public policy is heading in the new government.’