BUENOS AIRES, Argentina-The Budget Law approved the end of last year established that the state-owned cellular operator, Ancel, could sell up to 40 percent of its shares. However, in June, the government decided not to proceed with the privatization and go forward with a 1900 MHz personal communications services (PCS) auction instead.
Ignacio Perrone, senior analyst at The Yankee Group, explains that the partial privatization of Ancel will not take place for the moment since “it is not attractive to global operators that always come in wanting full control of a company’s operations, something that would not have happened here (in Uruguay) since the government is only allowed to sell a portion of the company. According to Perrone, “The situation has a political conflict added to it since there are sectors opposed to privatization.”
The auction is perceived to be the best way for a global operator to enter the market and be competitive with the other players in the area, Movicom Bevicom BellSouth will begin to install their 2.5G networks in Montevideo, the capital of the Republic, which should be operational in 2003. There is still no sign that indicates which direction Uruguay will go with 3G, although the most probable scenario is that it will align with whatever Argentina and Brazil do.
The Yankee Group anticipates that by 2006, cellular telephony will have a 27-percent penetration rate, with three operators competing throughout the country. By then, fixed telephony will have 38 lines in service per every 100 inhabitants, provided by the state-owned company Antel. This means that, contrary to the trend being observed in most countries in the region, within five years Uruguay will continue to have more fixed-line subscribers than cellular.
