Telefonica's Venezuela unit pays roaming debts-reports

Reuters | Thu Dec 9, 2010 10:55am EST
* Movistar cancels $600 mln in roaming charges
* State provided currency eventually
Dec 9 (Reuters) – The Venezuelan subsidiary of Spanish telecom company Telefonica (TEF.MC) has paid $600 million in debts to foreign roaming providers, according to media reports.
Many local and foreign businesses in Venezuela have complained of lack of access to dollars due to strict currency controls, and Telefonica’s Movistar unit said it was cutting some roaming services in August due to this. [ID:nN26230034]
“We’ve finished paying old debts,” Movistar President Juan Antonio Abellan said, according to the media reports on Thursday. Abellan explained that the company had eventually been able to obtain the currency from the state.
Movistar officials were not immediately available to confirm the reports.
President Hugo Chavez’s government has a multi-tiered exchange system in place — with dollars available at a cheaper price for essential items like medicine — to counter what it calls “capitalist speculation” and excess capital flight.
Telefonica, the euro zone‘s biggest telecom by market capitalization, is also seeking to repatriate $1.8 billion profits from Venezuela. [ID:nN0296119]
Venezuela is Telefonica’s third-most important market by revenue after Brazil and Argentina.
Like other multinationals in Venezuela, it took a cash hit from a devaluation of the bolivar currency in January and has had to contend with new foreign exchange controls.
Over the last three years Telefonica has repatriated some $550 million in Movistar earnings. The company is Venezuela’s second-largest telephone provider after state-owned CANTV. (Reporting by Eyanir Chinea, Writing by Andrew Cawthorne; Editing by Lisa Von Ahn)
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