Telefonica del Peru believes its spectrum licences may be renewed before the end of the year.
After a review the Peruvian government entered into negotiations with the operator regarding a renewal in August. Telefonica’s Movistar brand is the number…
Telefonica del Peru believes its spectrum licences may be renewed before the end of the year.
After a review the Peruvian government entered into negotiations with the operator regarding a renewal in August. Telefonica’s Movistar brand is the number one operator in the country with a more than 50% market share.
Speaking on Telefonica’s Q3 conference call Santiago Fernandez Valbuena, head of the group’s LatAm operations, said he felt the renewal process was coming to an end.
“It’s very likely that before the end of the year the process of [licence] renewal will find a satisfactory completion,” he said.
Telefonica’s licences in Lima and Callao expired in May 2011 while a third expired in February this year.
Marceli Passoni, an analyst at Informa, expects the licence to be renewed soon. “The only issue is how much the government charges,” she said.
Speaking on the conference call Valbuena also addressed the company’s 10-year tax dispute with the Peruvian government, which claims the operator owes PEN2bn (US$760m).
Valbuena said that he did not expect a resolution soon and that the issue was still working its way through the courts, adding that “any other constituency in the world would accept [the disputed sum] as tax-deductible”.
The taxes date back to the start of the last decade and have substantially grown due to compound interest.
The transport and communications ministry has said that the tax issues are not in its domain and that they will not factor in the concession renewal.
Valbuena confirmed that the company made a partial repayment to the tax authority of PEN134m (US$49.7m) at the start of the year.
