Claro, Movistar hit with $1.6B fine for contract breach - Mobile World Live

Claro, Movistar hit with $1.6B fine for contract breach

26 JUL 2017

Colombia operators Claro and Movistar were ordered to pay a combined sum of COP4.8 trillion ($1.6 billion) to the Government after an arbitration tribunal found both companies in breach of network licensing agreements.

Government agency Ministerio de Tecnologías de la Información y las Comunicaciones de Colombia (MINTIC) said the decision followed a lengthy contract dispute with operators Movistar, owned by Telefonica, and America Movil subsidiary Claro.

The row surrounds ten year operation permits issued to both companies in 1994. At the expiry of the contracts, operators were bound to return infrastructure back to the Government – a clause both companies have contested.

Despite a number of new rules being drawn-up in the country since, the tribunal said the initial contract terms were valid. As a result the operators were told to pay compensation for the period between the expiry of their contract and 2013, when legal action began.

Although the official statement did not define the fine given to each company, Reuters reported Movistar was liable for $1.02 billion with Telefonica made to pay $529 million.

In a statement, MINTIC said the sum was equivalent to the value of the “goods, elements, equipment and infrastructure necessary for the provision of the service concessioned to the date of contract completion in November 2013.”

America Movil said it was seeking legal advice on the decision, while Telefonica is yet to make an official comment.

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Chris Donkin

Chris joined the Mobile World Live team in November 2016 having previously worked at a number of UK media outlets including Trinity Mirror, The Press Association and UK telecoms publication Mobile News. After spending 10 years in journalism, he moved...

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