Argentina's universal service fund could be used for loans

The Argentine government plans to reformulate the universal service fund so that the money can be returned to the sector in the form of loans for telecommunications operators.

“The idea is to eliminate free distribution, which led to a lot of arbitrary use of the fund,” said Alejandro Cosentino, minister of innovation, science and technology, speaking to journalists.

Until last year, the money from the universal service fund was handed out as non-refundable contributions that were usually provided for connectivity projects carried out by state companies.

“In general, we see that 30% of the available money is used,” economist Marcos Orteu said last year during an event organized by the Mesa ICT working group.

“We have to transform it into an exclusive financing system for the industry,” said Cosentino.

The official did not give any further details because the plan is still being developed. No decision has yet been made on who will be the administrator either.

“We're seeking to create a totally transparent administration, but it's a project and projects need their process and analysis to be completed,” he said when asked by BNamericas.

In March, the economy ministry was designated as the trustor representing the State for all existing trust funds, including the universal service fund.

The fund is formed with a duty of 1% on sales of telecommunications services.

SATELLITES

Along with allowing Starlink to start offering services and granting authorization to low orbit companies Kuiper and OneWeb to operate, the government created a registry for the provision of satellite facilities, which will allow greater opening of the market and new satellite companies to enter the country, according to Cosentino.

Previously, processing of registration for the provision of satellite services took about two years.

Cosentino mentioned that around five satellite companies will also be authorized to offer services in Argentina in the coming days.

SIMPLIFICATION OF REGULATIONS

Cosentino also spoke of the need to “review the state of the art” and improve regulation, although he warned that “dismantling bureaucracy is very complex.”

The government of President Javier Milei has been trying to reduce the role of the State and simplify regulations and reduce red tape in all areas since it came to power in December.

Cosentino said that the goal in telecommunications is simply to provide the regulations that give companies the necessary tools to compete.

One of the government's first measures in this regard was to repeal decree 690, which imposed price controls on telecommunications services, preventing companies from raising rates.

The recently appointed undersecretary of communications and connectivity, Héctor Huici, said that the industry needs “rules and referees.” 

“The rules must be few and applied objectively and transparently,” he underscored.

Auditor of regulator Enacom, Juan Martín Ozores, spoke in the same vein, mentioning the need to design agile, high-quality and efficient processes.

It is estimated that there are around 41,000 rules and standards that currently apply to the ICT and broadcasting sector.