Reuters: Regulatory News: Argentina gives state a role in mobile phone sector

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Argentina gives state a role in mobile phone sector Sep 5th 2012, 19:30 Wed Sep 5, 2012 3:30pm EDT * Gov't cancels tender to operate 3G frequencies * State company will operate 25 percent of spectrum BUENOS AIRES, Sept 5 (Reuters) - Argentina's government said on Wednesday a state company would start operating mobile phone frequencies after it canceled a tender for part of the 3G spectrum on the grounds that it risked monopolization. Planning Minister Julio De Vido said five companies submitted bids after the tender was launched in May 2011, but that only one of them - Claro, a unit of Mexican tycoon Carlos Slim's telecom giant America Movil - met the necessary financial requirements. The contract to operate 25 percent of the country's 3G airwaves was not awarded to Claro, however, because that would have created a virtual monopoly, De Vido said. The frequencies will be operated instead by the state telecommunications company ARSAT, which could exploit them in partnership with small- and medium-sized companies or major operators. "We're tired, we're fed up of monopolies and we don't want to do anything that causes a situation in which companies, which maybe today don't have a monopoly as service providers, end up becoming (monopolies)," the minister told a news conference. President Cristina Fernandez has steadily increased the state's role in Latin America's No. 3 economy in recent years, nationalizing leading energy company YPF , the main airline, and billions of dollars in private pension funds since 2008. Shares in local telecommunications companies fell after the announcement, although the benchmark MerVal share index held broadly steady. Telecom Argentina, which was among the five bidders, was down 3.8 percent at 13.90 pesos per share in mid-afternoon trade in Buenos Aires. "(Stock) investors aren't happy about the incursion into the mobile phone business," said Dionisio Corneille, director at the Corneille brokerage. The companies that bid for the 3G contract were NII Holdings' Nextel Communications Argentina, Telecom Argentina - controlled indirectly by Telecom Italia - Claro and two local groups. Argentina's mobile phone market is split up between Nextel, Telecom, Claro and Telefonica's Movistar. Link this Share this Digg this Email Reprints

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