Having decided to expropriate the stake of Spanish oil giant Repsol in local energy company YPF, the Argentine government has made clear that it expects other foreign-owned businesses, including telcos, to invest in the country.
In a speech yesterday,…
Having decided to expropriate the stake of Spanish oil giant Repsol in local energy company YPF, the Argentine government has made clear that it expects other foreign-owned businesses, including telcos, to invest in the country.
In a speech yesterday, President Cristina Kirchner emphasised the “necessity” for foreign-owned companies to re-invest in the country, while also stating that she did not have a problem with companies making profits.
“The businesses based here are Argentine businesses,” she said, referring even to those that have foreign shareholders.
Kirchner specifically noted the blackout that Telefonica’s local unit suffered on its Argentine mobile network earlier this month and said she hoped the government authorities would take action on this promptly.
According to Telefonica’s 2011 annual report, the company’s operations in Argentina made revenues of €3.2bn in 2011, up 3% on the previous year.
The main subject of Kirchner’s speech yesterday was the move to renationalise a 51% stake in YPF held by Repsol. Repsol currently holds a stake of 57.43% in YPF.
The government has sent its bill to the country’s congress, while Repsol and the Spanish government have complained bitterly.
Telefonica declined to comment on Kirchner’s speech.
Jose Otero, the president of Signals Telecom Consulting, said that the Argentine government’s decision would not have a big impact on the daily operations of telcos.
“They have grown accustomed to the aggressive rhetoric displayed by government officials as well as direct/indirect confrontations with the government,” Otero said.
He added that the threat of government intervention had been stated to the press on more than one occasion.
According to figures from Signals Telecom Consulting, Telefonica’s Movistar has a 30% share in the Argentine mobile market, behind America Movil’s Claro on 34%.
Telefonica controls 46% of the country’s fixed telephony lines and 31% of its fixed broadband lines.
