Bolivia plans telecoms takeover

Entel to be considered as the next target in renationalisation drive.

    Morales came to power promising to return many businesses to state control [GALLO/GETTY]

    Evo Morales, Bolivia's president, visited Rome this month to discuss the possible nationalisation with the Italian government.
    Bolivia's telecommunications sector was privatised in the mid-1990s by Gonzalo Sanchez de Lozada, a former president, alongside the oil and gas, water, power, railway sectors as well as the national airline and pension plan.
    Privatisation appears to have done little to alleviate poverty in Bolivia and Morales was elected in 2005, having pledged to return many former government businesses to state control.
    But Entel, now Bolivia's chief cellular phone and internet service provider, is considered by many to be the sole success of Bolivia's privatisation drive.
    In 1996, the government sold 50 per cent of Entel, then the National Telecommunications Co, to Stet International, which later merged with Telecom Italia, in exchange for a promise that the Italian company would invest US$608m in improving the state company's service.
    Officials from the company said this year that Telecom Italia had invested more than promised in order to stay ahead of the competition in Bolivia's now deregulated telecommunications market.
    The company currently controls 68 per cent of Bolivia's long-distance market, 67 per cent of its mobile phone service, and 90 per cent of the rapidly growing internet market, according to Bolivian regulators.
    On May 1, Morales issued a decree nationalising Bolivia's oil and gas industry.
    Revenue share
    Foreign oil companies were eventually permitted to remain in the country after granting the government a greater share of their revenues and ceding control of their Bolivian operations to the state.
    In January, the president wrapped up long-running negotiations in the nationalisation of Aguas de Illimani, the La Paz water utility sold to Suez, a French transnational, in 1997.
    The following month, Morales nationalised a tin smelter owned by Glencore, a Swiss mining business. He has also indicated that he wants to exert more control over Bolivia's mining industry.

    SOURCE: Agencies


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