Risk Of Expropriation Could Limit Foreign Investment


Bolivian President Evo Morales is reported to have issued a warning to mobile operators Tigo and Viva , threatening nationalisation if they refuse to cooperate in criminal investigations. The two privately-owned companies have been accused of failing to provide the Bolivian police with information required in a series of criminal investigations in a timely manner , whereas the response from state-owned Entel Movil has been immediate . BMI is concerned that these threats could materialise into tangible action, given Bolivia's recent history of expropriations and policy continuity over the long-term.

President Morales suggested that criminals were taking advantage of the slow response times of Viva and Tigo, in order to carry out their activities. The president acknowledged that the companies w ere not complicit in the crimes; however, nationalising the two would force them to meet their obligations to offer immediate assistance to the authorities. Much of this relates to the large number of inactive subscriptions in the country, believed to be around 4.4mn according to official data for the year to date. At the end of 2012, there were 9.3mn active subscriptions, for a penetration rate of 86%. However, the government believes there to be just under 14mn total subscriptions, indicating that a large number of these are inactive or the result of multiple SIM use. President Morales believes these unregistered SIMs have been used by criminals to facilitate robberies, kidnapping and terrorist attacks.

These problems are particularly important in heavily prepaid-based mobile markets and mobile registration was introduced in December 2009 in an attempt to curb this. The Bolivian regulator, La Autoridad de Telecomunicaciones y Transportes (ATT), set a registration deadline of May 31 2010, and reported that 95% of users had successfully registered their phones by this date. The remainder would have their service cut off. Given that this process occurred over three years ago, and the reported prevalence of inactive subscriptions, it might be advisable to start another round of registration before nationalisation is considered.

Mobile Growth At Risk Over Long-Term
Active Subscriptions (LHS) & Penetration (RHS), 2005-2012

or Register now for free to read the full article

This article is tagged to:
Sector: Telecoms
Geography: Bolivia

Related products in our Store...

Check out our most popular reports below or view more in our store