Uruguay rejects cell phone company Movistar’s appeal that state competitor Antel engaged in anticompetitive behavior

Uruguay’s executive branch rejected Movistar’s appeal of a decision by the Communication Services Regulatory Unit (Ursec). The regulatory unit had declined to pursue accusations by Movistar that Antel was abusing its dominant market position.

The decision by the executive branch stated that Ursec “resolved that there was no standing for the claim by Telefónica Móviles del Uruguay S.A.” (Movistar) first submitted on May 8, 2009 against “the policy developed by Ancel known as ‘our way of talking, now free’ that allowed free calls to land lines, because it did not meet the elements required to constitute an anticompetitive practice”.

Movistar appealed Urusec’s finding, claiming that Antel had “abused its dominant (market) position”, a practice prohibited by the Promotion and Defense of Competition law.

Ursec had found that Antel had not abused its dominant position, nor had its subsidiary  because their competitors could have replicated the offer.

In their resolution, the executive branch announced that “it can be concluded that the elements necessary to constitute anticompetitive conduct of an exclusionary character that affected the level of competition in the mobile phone service market were not present”.

At the same time that Ursec had originally ruled Antel had not abused its dominant market position, Ursec sanctioned Movistar for misleading advertising during its Paketón 280 promotion.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay Business Brief: Antel plans to connect 250,000 homes to fiber optics this year.

Carolina Cosse, the President of Antel, Uruguay’s state telecommunications company, announced Antel plans to add fiber optics connections to 250,000 homes by the end of 2013.

Uruguay’s state telecommunications company plans add fiber optic connections to 250,000 homes in Uruguay

During the public company’s annual review on July 29, Cosse said that because Antel  has already connected 145,000 homes to its fiber optic network the company increased its 2013 goals.

Cosse also dismissed the rumors that she will run as a candidate for the Frente Amplio during the next election cycle.

She said she is not considering a run and added that all her thoughts are on managing the public company as best as possible.

This Uruguayan Business Reports news article is a translation of a news article that appeared in the Uruguayan newspaper El País. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.

Uruguay’s state-run companies post budget deficit of $1.14 billion USD

Budget proposals submitted for 2013 by UTE, ANCAP, ANTEL, Correos and OSE predict that their total deficit will reach $1.14 billion USD. Most state companies will take on debt to cover the gap.

Uruguay’s six principal state-run business will all run deficits in 2013 according to budgets they proposed to Uruguay’s central government. The budget proposals are expected to be approved.

In every one of Uruguay’s major state-run companies expenses and investment surpassed income. The deficits will force Uruguay’s state-run companies (with the exception of the telecommunications provider Antel which can cover its deficit with cash) to use up saved resources or take on millions of dollars in external financing.

Generally the proposed budgets use conservative revenue estimates but in cases like UTE, which is vulnerable to the changes in climate that affect hydroelectric dams or Ancap which is subject to crude oil price fluctuations, deficits could be higher than predicted.

For the first time Antel is predicting a budget gap of $36.5 million USD. Nevertheless Antel is the state-owned company in the best financial condition because it is holding onto a large enough cash balance to cover next year’s expected shortfall.

UTE also stands out among the state-owned firms. They are predicting a whopping $576 million USD budget shortfall. The state electric company is predicting revenues of $2.066 billion USD and expenses at $2.642 billion, which leaves $576 million USD. UTE expects to cover that difference with $445 million USD in external financing and $131 million of their reserves. The external financing is associated with $370 million in outside investment in UTE’s new projects. The execution of those investment projects is conditional on the allotment of funds by Uruguay’s Office of Planning and Budgeting.

This Uruguay Business Reports news article is a translation of an article that appeared in the Uruguayan newspaper Unoticias. The original article is available in Spanish here. Uruguay Business Reports translation by Donovan Carberry.