The Uruguayan government has suspended telecommunications license of Claro Americas, fearing that the telecom giant will monopolize the telecoms sector in the country.
A subsidiary of Mexican billionaire Carlos Slim’s America Movil, Claro Americas is the smallest telecom firm in Uruguay. It is not clear why the government revoked the license. According to the government, Claro’s broadcasting service is not ‘legitimate.’
With 800,000 mobile customers, Claro controls about 16 percent of the communication market in Uruguay.
The decision to revoke the license came the day the senate was due to debate how Uruguay could avoid monopolies in the communications and broadcasting sectors.
In a speech broadcast by local radio, President Jose Mujica said he did not want Claro or Argentina’s Globo become owners of Uruguay’s communications.
Claro, which entered Uruguayan market in 2008, may now sue the local authorities in an international court.
Analysts say this is a heavy blow to America Movil, whose dominance in Mexican telecom market has now been threatened by the AT&T. Earlier in April, America Movil’s Ecuadorian subsidiary was fined $138.4 million for anti-competitive practices.
Uruguay has now passed a new communications law that critics say is ambiguous and hands the government too much regulatory oversight. The law states entities applying for licenses to operate audiovisual media should not be affiliates or subsidiaries of foreign companies.
According to Reuters, Mujica last year signed a presidential decree revoking an agreement that gave Claro rights to provide cable television services in Uruguay.