More legal issues have fallen in the way of Venezuela’s plans to tender a personal communications services license earlier this month.
Conatel, Venezuela’s telecom regulatory agency, was set to tender a license by Nov. 4, but protests from three cellular operators have stalled the process by at least two weeks. Conatel has tried to tender a license for about four years now, say analysts, but regulatory and legal issues continue to postpone the process.
The latest delay involves three rural cellular service providers, InfoNet, Elca and Digitel. The three were given free concessions last year to operate service in rural areas where nationwide operators Movilnet and Telcel failed to offer service. The three operators, which analysts say are angry at Conatel for not allowing them to offer nationwide cellular service, have taken legal action against Conatel, claiming Conatel followed improper procedures in granting the new license.
Leslie Arathoon, Latin American analyst with Pyramid Research in Boston, believes the longer Conatel waits to tender a license, the less attractive it will be to consortia.
“Competition is heating up now, and the government would have gotten a lot more money from the license last year,” she said.
In an unprecedented move, Conatel last year prohibited Movilnet-a subsidiary of CanTV whose owners include GTE Corp. and AT&T Corp.-and Telcel, majority owned by BellSouth Corp., from adding new customers until their network capacity problems improved. Both carriers were experiencing network growing pains because the number of cellular customers had increased dramatically. Capacity problems have now been resolved through digital networks. Protests from existing operators over tender methods and other legal issues have been the primary roadblocks in tendering an additional license.
Analysts believe the new license will be tendered before the end of the year, as the current president wants to push the process through before presidential elections. The new licensee will receive 30 megahertz of spectrum, with Movilnet and Telcel each receiving 10 megahertz of PCS spectrum for free, said Bruce Edgerton, analyst with the Strategis Group in Washington, D.C.
Companies that have expressed interest in the tender include Bell Canada, Telesystem International Wireless Inc. and British Telecommunications plc. Bell Canada is rumored to win the license, and has an agreement with Nortel Networks to supply digital equipment.
