Colombia issues $1.6B fine to Movistar and Claro

Colombia issued $1.6B fine to Movistar and Claro

The government of Colombia has ordered the operators Claro and Movistar to pay a total of COP4.8 trillion ($1.6 billion) after they were found to have violated network licensing agreements by an arbitration tribunal.

According to the Ministerio de Tecnologías de la Información y las Comunicaciones de Colombia (MINTIC), the issue relates to ten year operating permits that both firms received in 1994. When the permits expired, a particular clause obliged both companies to hand certain infrastructure back over to the government – a point which the operators are disputing.

While Argentina has introduced several new rules since these permits were issued, the tribunal found that the original terms of the contract were still valid. Accordingly, the operators have been ordered to pay compensation for the time that lapsed between the expiry of their contracts and the commencement of legal action in 2013.

While the individual fines issued to each operator have not been officially unveiled, reports have placed Movistar’s at $1.02 billion, of which its parents firm Telefonica will be forced to pay $529 million. MINTIC said that the fines represented the value of all “goods, elements, equipment and infrastructure necessary for the provision of the service concessioned to the date of contract completion in November 2013.”

Claro’s parent firm America Movil has stated that it is looking into a possible legal challenge against the fine, while Telefonica has made no official statement.

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