Entel Bolivia

cancelled

Entel Bolivia was the Bolivian state owned company that had the monopoly to provide national and international long distance services in the country. Local fixed phone services in Bolivia are provided by 13 subscriber cooperatives, each of them serving a specific concession area. The main cooperatives are Cotel (La Paz) and Cotas (Santa Cruz). Entel Bolivia was privatized through the Bolivian Capitalization Program in September 1995 when a 50% stake was sold to STET International for US$610 million investment commitment. The remaining shares of the companies were divided between employees (2.5%) and Bolivian citizens (47.5%) through the Collective Capitalization Fund. Due to the capitalization program's requirements, the US$ 610 million were transferred to Entel Bolivia as a capital flow increase. As of 2000, the company had utilized over US$500 million of that capital towards network expansion and modernization. Entel's privatization package included a six year exclusive period to provide national and international long distance services. These monopoly privileges are set to end in November 27th, 2001 when the long distance market will be open for competition. The privatization package also included the rights to operate the second band of phone cellular service in the whole country, which has not been put to use by the company as of December 2000. The package also included commitments to connect public phones in a predefined number of rural areas. Entel launched its cellular phone services in 1996, signing up approximately 400,000 subscribers by May 2001. Entel Bolivia had over 3000 KM of fiber optic cable by the end of 2000. By the end of 2000, Entel competed in the mobile market against Telecel and Nuevatel, which became the third competitor in the Bolivian Market when it when it started to operate a PCS license in November 2000. Despite the entry in 2002 of six competitors into the Bolivian long distance and international market, Entel still had 71 percent of the market by end 2003 with their 629,800 long distance customers. The mobile unit of Entel, Movil de Entel, experienced 69 percent growth between 2002 and 2003, elevating the customer base to nearly 800,000 by end 2003. Movil de Entel had 56 percent market share at the end of 2003. On March 29, 2007, the Bolivian government issued a legislative measure to set up a ministerial commission to start the nationalization of Entel Bolivia. The Bolivian government further in 2007 adopted two more measures with which it abrogated the laws on the basis of which the previous government had acknowledged that Entel Bolivia had fulfilled the obligations it had assumed when the company was privatized and also annulled a series of further administrative measures, especially one passed in 1995, which had launched the Entel Bolivia privatization process. On October 12, 2007, after an unsuccessful attempt at conciliation, an arbitration request was filed by Telecom Italia with the International Centre for Settlement of Investment Disputes of the World Bank. On November 8, 2010 Bolivia's government has reached an agreement to pay European holding ETI US$100mn compensation for the nationalization of incumbent telecoms operator Entel on May 1, 2008. Entel plans to invest over US$27mn in 2006. Wireless Connections: 2003 2004 2005 Entel Bolivia 783,000 1,146,000 1,402,241 As of December 31, 2005, Entel Bolivia had 1,447,000 mobile lines, an increase of 26.3% compared to December 31, 2004 (1,146,000 mobile lines) and 57,000 fixed lines subscribers, an increase of 14.0% compared to December 31, 2004 (50,000 fixed lines). The company invested US$ 136 million from November 1995 until December 1996, US$ 149 million in 1997, US$ 109 million in 1998, US$ 39 million in 1999, and US$ 67 million in 2000. Entel's capital expenditures for 2002 were about $19 million. During 2005, Entel has earmarked investment of US$23mn. The 2007 CAPEX for Entel Bolivia was calculated by subtracting TIM Brazil (subsidiary of Telecom Italia) CAPEX (Euro 865 million) from Latin America CAPEX for Telecom Italia (Euro 881 million). The Euro 16 million CAPEX was converted into dollars with 0.73Euro/$ exchange rate. The result was around US$22 million.