The Colombian Senate has approved measures to inject CPs3.5bn (US$1.8bn) into fixed-line operator Colombia Telecomunicaciones (Coltel), in a move that could potentially lead to a future tie-up with Telefonica’s Movistar.
The Colombian state holds a…
The Colombian Senate has approved measures to inject CPs3.5bn (US$1.8bn) into fixed-line operator Colombia Telecomunicaciones (Coltel), in a move that could potentially lead to a future tie-up with Telefonica’s Movistar.
The Colombian state holds a 48% stake in Coltel, with the rest being held by Spanish incumbent Telefonica.
Local newspaper La Republica reported that the approved plan authorises a later merger with a mobile operator, specifically Movistar, the local mobile unit of Telefonica.
A Telefonica spokesman declined to comment.
The plan will now reportedly pass to the president for approval.
Coltel has been facing financial difficulties, including a high pension bill.
According to a statement by the Colombian Congress, one senator, Honorio Galvis Aguilar, had said that if capital had not been put into the business, it would have entered into liquidation and the state would have needed to assume a pension bill of Ps7.5bn (US$3.9bn).
When the government put forward its plans to capitalise Coltel in September, it said that its investment would be in proportion to its stake in the company.
The plan also allowed for the government to merge Coltel with other entities in the IT/Communications sector.
At a subsequent press conference in September, it was revealed that the primary candidate for this merger would be Movistar, Telefonica’s local mobile unit.
