Wednesday, April 4th 2012 - 04:12 UTC

Argentina announced heavy fine for mobile phone provider that left 16 million clients out of service

The Argentine government said on Tuesday it will sanction heavily the local unit of Spanish Telecommunications Company Telefonica SA mobile phone service provider after a service disruption left more than 16 million clients without phone and data service for several hours.

Movistar is very profitable and should make the necessary investments said Ceferino Namuncura

The head of Argentina’s federal communications regulator, Ceferino Namuncura, said his agency will “impose the highest fines” and require Telefonica to compensate consumers for the service outage on Monday.

“It worries us a lot at a time when companies, especially Movistar [Telefonica], are very profitable and which we understand should be offering excellent service. That profitability allows them to make the investments that the government and consumers demand” he said in a televised press conference.

“And this is not over with a fine,” he added. “Federal Planning minister Julio De Vido has asked us to look into the matter in detail in order to determine how they are going to compensate consumers,” Namuncurá said, as we warned that they would take “any measures necessary” in order to protect consumers.

He also clarified that whatever sanction the Government applies, will be unrelated to any compensation that the company offers costumers.

Argentine Communications Secretary Lisandro Salas also weighted in on the situation, saying that what “concerned them the most was the company’s regrettable attitude towards costumers.”

“The company did not protect them, since it failed to communicate what was happening.”

Telefonica Argentina, which provides mobile phone service under the brand Movistar, said in a statement that it will reimburse its clients and offer free text messaging during the four-day Easter weekend.

Telefonica’s nationwide wireless network was down for hours Monday morning and early afternoon, which disconcerted many users in a country that boasts one of the highest rates of mobile-phone ownership in the world.

“In this case it was a software problem” Namuncura said.

“Movistar continues to study the causes of this extraordinary incident,” the company said. Argentina has about 55 million wireless subscribers in a country of almost 41 million people. Telefonica ranked No. 3 in the country’s wireless industry at the end of last year, with 16.8 million users.

30 comments Feed

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1 jerry (#) Apr 04th, 2012 - 05:28 am Report abuse
I wonder if this is the first step in the CFK governmet trying to take over the cell telephone service. I have heard that cell service is a VERY LARGE business in Argentina.
2 Skåre (#) Apr 04th, 2012 - 05:54 am Report abuse

The very fact that this fine has been announced so rapidly, without any time to conduct a proper investigation of facts and liability, makes it so obvious to the whole world that this is a politically motivated fine against yet another Spanish company. Yet more shame of Argentina and yet another sterling effort by the current government to dissuade any international company with any sense from investing in Argentina.

Yet again David Cameron's warning to Mariano Rajoy is vindicated.
3 GreekYoghurt (#) Apr 04th, 2012 - 07:04 am Report abuse
Obvious attempt to nationalist telephone service is obvious.
4 JuanStanic (#) Apr 04th, 2012 - 10:11 am Report abuse
It's not the first time this happens, Movistar has left many people without service before and got unharmed.
5 PirateLove (#) Apr 04th, 2012 - 10:51 am Report abuse
Abandon ship!!! The pirates are coming!!!!!
6 DJ56 (#) Apr 04th, 2012 - 10:52 am Report abuse
So why the sudden fine this time, without a proper investigation?
7 Skåre (#) Apr 04th, 2012 - 10:59 am Report abuse
@4 JuanStanic

FACT: there isn't a telecommunications network anywhere in the world that doesn't suffer occasional failures. Attributing blame in the manner done in this instance very clearly just a convenient excuse in order to make a political point and has basis in actual fault.

Look at the other utilities in Argentina and how they have amongst the worst reliability records anywhere in the world. Where are the massive fines for their failings?

Look at the rail systems in Argentina. When has a fine ever been announced with 24 hours of a fatal train crash?
8 A.J.Rimmer (#) Apr 04th, 2012 - 11:11 am Report abuse
Hmm, a company which has a high profit margin is now going to be fined heavily by a corrupt government, for a disruption of service??

what's next? the local bus was 10 minutes late, therefor it shall be fined heavily for disruption of service? Or, my Doctors appointment was at 4pm, it is now 4:30pm, and he still hasn't seen me? pitiful in all honesty.

This act reeks of gold digging opportunists, trying desperately to grab what they can, when they can before there economy shrivels into nothingness.
9 British_Kirchnerist (#) Apr 04th, 2012 - 12:31 pm Report abuse
So businesses can just do what they like and tke their customers for granted in your world then? Great move by my Queen, fighting as ever for the people =)
10 Skåre (#) Apr 04th, 2012 - 12:41 pm Report abuse
@9 British_Kirchnerist

Fighting for the people? Are you having a laugh? The chances of that 'fine' ending up anywhere other than her personal Swiss bank account are exactly zero.
11 Brit Bob (#) Apr 04th, 2012 - 12:48 pm Report abuse
Another conflict between a Spannish company and the govenment of Argentina. This is another big squeeze for quick and easy money by the failing regime. It goes to prove that Argentina is not a good place to do business.
12 GreekYoghurt (#) Apr 04th, 2012 - 01:55 pm Report abuse
Argentina's next target has fallen onto a telecoms outfit. Whatever next I hear you all cry?
13 yankeeboy (#) Apr 04th, 2012 - 03:05 pm Report abuse
This is a warning shot to Spain. Screw with us over YPF and EVERY Spanish company is going to have problems.
Any company with a significant balance sheet and a weak foreign gov't is gong to be in trouble shortly.
You will start to see that companies will start to shut down as they refuse to make capital improvements and their lines etc start to fail.
The wheels are flying off now and CFK is cornered, when animals get panicked and cornered they start biting and lashing out.
Watch what happens when the IDB and WB funds are shut off and/or the US Supreme Court declares the BCRA reserves are truly an RG piggy bank.
Gonna get ugly.
14 GreekYoghurt (#) Apr 04th, 2012 - 04:31 pm Report abuse
@13 When is the six monthly update on US Supreme court assessment on whether to attach the BCRA as a part of the Government of Argentina?
15 ptolemy (#) Apr 04th, 2012 - 04:33 pm Report abuse
This says it all: “It worries us a lot at a time when companies, especially Movistar [Telefonica], are very profitable ...” Yeah, this country does not want any business to make a profit, now or in the future. Private business is on the way out in Argentina.
16 ElaineB (#) Apr 04th, 2012 - 05:16 pm Report abuse
The Argentine government wants a state capitalist country where all profits go directly into the hands of corrupt government officials and into their own personal bank accounts.
17 yankeeboy (#) Apr 04th, 2012 - 05:19 pm Report abuse
14. I think there will be a ruling by June of this year.
18 JuanStanic (#) Apr 04th, 2012 - 05:23 pm Report abuse
Movistar people went today to the Radio and themselves said they will pay the fines because in the regulations it's estipulated they should, and that they always agreed to those. If they claimed they wouldn't pay and asked for an investigation then an investigation they should have.

So what's your point? Never apply the fines?

I think it's for the better to apply fines, set a precedent and warn every company that if they fail to follow their contracts, legislation and codes, then they will be fined as well. And fine them, not let it go.

I believe huge fines should have been given to TBA. Truth is, they wouldn't be able to pay half, they wouldn't be able to have the trains going because of lack of funds and people would have been f*cking mad for not being able to use the trains.
19 yankeeboy (#) Apr 04th, 2012 - 05:43 pm Report abuse
18. Did the phone company do something illegal or was it a technological glitch that they fixed as soon as they could?
I think the later and no they should not be fined. How can you fine someone for a break down out of their control?
What a silly way to extort cash it is just thuggery.
RGs have been brainwashed from birth to think businessmen are evil and just out to extract $ for nothing. What a bunch of idiots.
Soon enough it won't matter because all the big business will either leave or be owned by CFK and/or her minions.
20 JuanStanic (#) Apr 04th, 2012 - 05:57 pm Report abuse
It's not wheter it was illegal or not. It's up to the regulations they accepted when Movistar started doing business. Movistar themselves said they accept the highest fine because it has to be so. So difficult to understand?
It's not me, it's not CFK, it's not my neighbour. It's Movistar saying so.
21 yankeeboy (#) Apr 04th, 2012 - 06:11 pm Report abuse
It is a way for CFK to regulate business out of the country just like YPF, Aguas Argentina, Aerolinas Argentina etc etc etc.
Cap the fees they can charge and then keep raising salaries and expenses until they eventually go out of business and the state takes over “to protect the people” ooops like they did with Anses.
22 ChrisR (#) Apr 04th, 2012 - 06:28 pm Report abuse
AND I wonder where the money collected from Movistar will eventually end up?

Le Camping by chance?
23 JuanStanic (#) Apr 04th, 2012 - 06:47 pm Report abuse
Then TBA wouldn't be running the trains. And trains would be extremely gloryfing for any government who took them and get them just a bit better.

If la Campora I wouldn't care that much. They would mismanage it and lost most of its juice. Now if Quebracho or one of those gets it...
24 yankeeboy (#) Apr 04th, 2012 - 07:04 pm Report abuse
Um same thing has happened with TBA, Ks have refused to allow tariff increases for 8 years but the cost of doing business has gone up tremendously, salaries are higher, peso is lower so all the imported parts are way more expensive. Why do you think they can't do maintenance? CFK doesn't want the trains that why they have not taken them over yet.
25 GreekYoghurt (#) Apr 04th, 2012 - 08:24 pm Report abuse
@22 Le Camping will definitely be running the telecom show, with Tracksuit Boy and Maximo at the wheel, burning through millions a day in losses.
26 jerry (#) Apr 04th, 2012 - 08:28 pm Report abuse
CrisR and ElaineB - I am beginning to like you both more every day.
27 JuanStanic (#) Apr 04th, 2012 - 10:06 pm Report abuse
The problem with TBA didn't start with the Ks. I can agree it got way worse but in no sense it started with them. It's all the result of a poor made concession and a powerless CNRT. Both come from the 90s.
28 Sonita888 (#) Apr 05th, 2012 - 01:25 am Report abuse
Lovely: Kill 51 people and injure over 700, because the brakes don't work in a train, nothing happens.
Leave 16 mill without cellphone for half a day and they have to pay a fine.
Honestly, I hate this bitch!
#24: They never let it go up, but they were getting 1 mill pesos PER DAY from the Goverment to do infrastructural crap (I know there are many missplelled words there, so... Sorry...)
#27: Ever wonder how it's never NOBODY'S fault? Or it's always Menem's fault...? ?Cause they had 8 years to fix it somehow, right? Just sayin'
29 GreekYoghurt (#) Apr 05th, 2012 - 08:00 am Report abuse
@28 that's because the Argentinian Government don't care about 51 people dying due to under-investment in train rolling stock. They cannot get any money out of that situation.

They do care about getting their hands on a telecommunications company because they can get personal money out of the company and use it to increase their own personal wealth.

Corrupt people rarely hide their intentions.
30 Tabutos (#) Apr 05th, 2012 - 08:55 am Report abuse
nationalize them quick! LMAO

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