Thursday, August 03, 2017

Payment for reversal of assets opens uncertainty to future investments

Next week, Telefónica and Claro should spend US$1.5 billion as a result of the license contracts signed in 1994. The operators will review the ambiguities of the award with the Arbitration Court and it is not ruled out that the decision be appealed.

The ruling issued on July 25 caused surprise in the sector . During 20 years there were changes in the laws that regulate contracts, which generated different readings and interpretations by operators and governments. Operators speculated that the Executive would only require them the equivalent in money for spectrum and infrastructure from what was got between 1994 and 1998. But they did not imagine that they would have to face the obligation to pay back an amount similar to the assets acquired in 20 years of operation: Claro shall have to pay the government US$1billion and Telefónica about US$535 million.

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