Argentina has fined Telefonica 43 million dollars for a mobile phone service interruption last month, which threatens to further exacerbate tensions between the two countries.
About 18 million clients of Movistar, Telefonica’s wireless unit, were without phone and data services for several hours on April 2 due to technical problems.
The penalty was announced Tuesday and comes after Argentina seized a majority control of domestic energy firm YPF from Spain’s Repsol.
The fine works out at the equivalent of 2.25 dollars to each customer and 6 million Pesos to the government (approx. 1.4 million dollars). Movistar has about 40% of Argentina's mobile phone market, as well as six million landline accounts.
Argentine Planning Minister Julio De Vido said the fine would send a strong message to other wireless providers that outages would not be tolerated.
“Cell-phone service quality has declined in recent months,” De Vido was quoted. “We need to have full service, not service that gets worse when you walk a few meters one way or another.”
De Vido also strongly recommended telecom companies to boost investment in land lines.
Argentina’s recent decision to seize control of YPF has generated strong reaction from Spain and upset European leaders. On Monday EU Trade Commissioner Karel De Gucht said the bloc would soon take action against Argentina.