Colombia’s ICT minister investigated over telecommunication contracts

Posted on May 13 2014 - 10:03pm by Today News
Diego Molano (Photo: El Universal)

Colombia’s Comptroller’s Office announced on Tuesday that it will be investigating the country’s technology and information minister after recent renovations of contracts with international telecommunication companies “raised doubts.”

The Comptroller’s Office claimed that in renewing Mexican Claro and Movistar, a daughter of Spain’s Telefonica, until 2024, Minister Diego Molano possibly failed to guarantee competitive equality in offering contracts and is effectively permitting a monopoly of the country’s telecommunications.

In May 2013, the comptroller’s office urged the need to adopt a plan to mitigate the risk associated with the termination and offering of contracts in the nation’s telecommunication market.

The watchdog highlighted the need to balance the needs for continued service with the clauses of reinvestment. Despite the comptroller’s recommendations, there has been little action.

Today, Claro has a commanding position with 60% of the telecommunications market in Colombia, followed by Movistar which has 30%. Colombia’s telecommunications have been under scrutiny due to the dominance of the Mexican telecommunication giant and the lack of robust and independent regulatory agencies.

MORE: OECD calls for telecommunications overhaul Colombia

Claro was fined $44 million in December of 2013 for engaging in anti-competitive practices of not allowing their customers to use the bandwidth of other providers and inflating numbers.

MORE: Colombia’s biggest ever phone bill

The comptroller’s office declared that in renovating the contracts permitted under article 68 of Law 1391, as Minister Molano did, he did not allow for a public debate or follow article 11 which stipulates that it must be done in an objective manner and avoiding monopolistic practices.

The office also stated that they were concerned because the 10-year contracts are very favorable to the telecommunications giants and can have detrimental results for the nation in the long run. The terms of the contracts could result in net losses for the Colombian government, according to local media.

Sources

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