Argentina Set to Pass Telecommunications Reforms

Argentina looks set to reform its telecom industry, which is struggling with a lack of foreign investment and slowing broadband penetration. The national Congress is debating a new telecom …

Argentina looks set to reform its telecom industry, which is struggling with a lack of foreign investment and slowing broadband penetration. The national Congress is debating a new telecom bill designed to allow carriers to offer bundled services.

The existing law, enforced in 1972, prohibits operators from offering both television and telephone services.

Reform is needed, analysts say, because smartphones are becoming more common in today’s Argentina, with the majority of young people now using mobile devices to access the Internet.

This may be good news for Telecom Italia, which has been waiting for the past year for the regulator’s approval to sell its stakes in Telecom Argentina.

The telecom bill is also likely to pave way for mobile virtual network operators, such as Britain’s Virgin Mobile, which provides a range of telecom services and purchases telecom capacity from rival networks.

In addition, the new law would eliminate national long distance rates, charging all calls at local rates, besides empowering the government to decide as to what price telecom capacity should be sold at. Such a measure, analysts say, is long overdue to push down broadband prices.

Argentina has been reforming its telecoms sector from 1990 onwards. First, it split the state-owned telecom firm ENTel into two parts and then set a 35% market share limit for telecom operators.

Now the country is talking of setting up a fund to finance broadband rollouts in remote and sparsely populated regions generally avoided by private telecom players. Tax money received from telecom firms will be paid into this fund.

Last week the government said it had received bids worth US$2.2 billion in an auction for third-generation (3G) and fourth-generation (4G) licenses.

Also under consideration is a plan to set minimum broadband speed and quality standards.

Last month, Argentina launched a satellite to provide broadband and other telecom services in remote regions of several South American countries, including Chile, Uruguay and Paraguay.

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