MercoPress. South Atlantic News Agency

Argentine state formalizes its participation in the mobile phone sector

Minister De Vido praised competition and prefers profits benefit Argentines

The Argentine government signed the decree on Thursday formalising the decision for the state to begin to control a part of the mobile phone sector, a measure announced on Wednesday by Planning Minister Julio De Vido.

The decree was signed into the Official Gazette, a decision that was said to be in place until the government sets up “another public bidding.”

On Wednesday Minister De Vido announced in a televised press conference that state-run satellite and telecommunications company ARSAT is to take over a contract which will allow them to control 20% of the country’s 3G airwaves.

The decision was made after five telecommunication groups had bid to take on the role. Four of which were rejected by the government on the grounds that they did not meet the financial requirements, and the only company that did meet requirements was Claro, however they were also rejected because if chosen, “they would have created a virtual monopoly.”

The main bidders included MII Holdings’ Nextel Communications Argentina, Telecom Argentina – controlled indirectly by Telecom Italia, Claro and two other local groups- , Multitrunk (a company of the Roggio Group) and Superfone (from the Vila-Manzano Group).

The Cristina Fernandez administration appears to have big plans for Arsat, a company whose budgeted revenue this year totals just 430 million Argentine Pesos, some 92 million dollars.

The company is already committed to a number of ambitious and very expensive projects, including the launch of a satellite next year and the deployment of a 58,000 kilometre nationwide fibre-optic network.

De Vido demanded that wireless carriers invest more to improve service quality because consumers often complain about poor service and a total lack of coverage in many areas. Earlier this year, the government fined Telefonica's local subsidiary about 185 million Argentine pesos for a massive service outage in April.

Minister De Vido said Arsat will work with cooperatives and smaller companies in the capital of Buenos Aires and the provinces, “with profits benefiting all Argentines”.