Telecom sector could see US$100mn investment in 2005

Bolivia could see investments of US$100mn in the telecommunications sector in 2005, the interim head of telecoms regulator Sittel, José Morales told BNamericas. "We don't have [official] estimates, but possibly we could [see] around US$100mn from the private sector," Morales said. Morales would not elaborate on details of which sectors could see the most investment nor would he say if the regulator had plans to offer new mobile spectrum licenses. However, Sittel expects Bolivia to have 2 million mobile phone users by the end of 2006, he said. Sittel announced in a report this week that mobile subscriber rates had reached 1.7 million by the end of the first quarter 2005 representing teledensity of just over 20%. There are 622.558 fixed lines. Morales attributed mobile uptake to three factors: Market liberalization in 1996, when the country was home to 33,400 mobile lines; a substantial drop in calling rates; and improvements in technology. When the market opened up the "mobile party pays" billing method was exchanged for calling party pays and more economic plans were introduced including prepaid. "The introduction of prepaid was very important. It began to grow significantly particularly in the peripheral and rural areas," Morales said. Morales sees the strongest growth coming from rural areas as prepaid mobile telephony is cheaper than fixed lines, which have fixed costs. The regulator said Sittel was working with "international organizations" to promote mobile use in rural areas but would not reveal investment figures nor provide details on what types of wireless technologies would be implemented. "All types of appropriate technologies will be used and implemented," Morales said. Morales added that Sittel was waiting for a proposal from a consultant regarding the best means of implementing universal access. Of the current total, 35% of all mobile subscribers are concentrated in the Santa Cruz department, 31% in La Paz, and 18% in Cochabamba. Morales would not comment on the potential US$3.9mn fine to be imposed on the largest operator Entel for allegedly failing to meet goals in service and expansion to rural areas. The fine imposed by Morales' predecessor René Bustillos is believed to be the key element that led to Bustillos' dismissal at the beginning of April. Morales will have the final decision on whether to uphold the fine or not. Morales said that the priorities for his tenure as head of Sittel were threefold: providing more information to users regarding their rights to complain about services; improve the procedures for making those complaints; and improve the efficiency of Sittel.