Local manufacturers net contracts worth US$80mn

Argentine equipment manufacturers have already confirmed contracts for 2004 worth 230mn pesos (today US$80mn) as a result of financing through the telecoms fund created in September, local daily El Cronista quoted communications minister Guillermo Moreno as saying. Telefonica de Argentina (NYSE: TAR) pledged 15mn pesos for the fund to help eight local companies build equipment worth 45mn pesos. Local firm Tevycom will produce ADSL modems that were previously imported, Siemens Argentina will make residential telephones that previously came from Spain and Italy's Pirelli will make cables locally now rather than supplying Argentina from Brazil. Telecom Argentina (NYSE: TEO) also pledged 15mn pesos for the fund and will spend 40mn pesos on cables, ADSL modems and residential handsets. Meanwhile, Moreno is expected to allow Tierra del Fuego provincial government to access the telecoms fund to help finance construction of a mobile handset factory. The factory will produce handsets for operator CTI, which is itself being revamped with US$150mn from Mexican parent company America Movil (NYSE: AMX), which acquired a 49% stake in CTI in July. CTI already has an agreement to buy 1.5 million handsets from Finland's Nokia (NYSE: NOK), which will be installing a GSM network for the operator next year. However, CTI would use the Tierra del Fuego factory for production of another million to 1.5 million handsets. The operator is believed to be deciding between a North American and a South Korean firm for the contract to build handsets in Tierra del Fuego. CTI was last reported to have about 1.2 million subscribers using its AMPS/CDMA analogue network.