BUENOS AIRES, Argentina—One of the effects of the Argentine crisis on the region is the recent rejection by Uruguay and Paraguay of the option to privatize their telephony companies.
The case of Paraguay is more complex because the fixed telephony monopoly operator, which has a cellular license, was set to be privatized on 14 June, and five companies purchased the bid documents. In Uruguay, although announcements were made that 40 percent of the cellular operator Ancel was to be privatized, the government has not yet called interested companies to participate in the auction.
The National Congress of Paraguay approved a project that has put the application of the Reform and Modernization Law on hold, therefore, suspending not only the Copaco privatization but the whole process for the reformation of the state, which also included the privatization of other state-owned companies. In any case, within a few months, the reform process could recommence once the suspension is lifted.
In Uruguay, the government sent the National Congress a bill to revoke articles 612 and 613 of the national budget, which approved the sale of 40 percent of cellular operator Ancel. If these two articles are annulled, as is planned, the partial privatization will be impossible. The opposition has collected more than 700,000 signatures in favor of the repeal of the articles through a plebiscite, and the government does not wish to lose a public consultation.
