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Venezuela - Market Intelligence Report
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Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation. Venezuela's telecommunications market was opened to full competition in November 2000, although very few companies have since been licensed to compete with the incumbent fixed-line operator, Compania Anonima Nacional Telefonos de Venezuela (CANTV). Several sectors of the market had already been liberalised at that time, notably the rural telecommunications market and the mobile sector. Recent years have seen considerable consolidation in these areas and some strong competitive fixed-line and mobile operators are beginning to emerge. By late-2007, the Venezuelan telecommunications market was composed of fixed local telephone and public telephony service providers, such as CANTV, Movistar (Telcel), Digitel, Veninfotel and Intercable; domestic long-distance service providers, such as CANTV, Movistar, Digitel, Veninfotel, New Global Telecom, Entel, Multiphone and Totalcom; international long-distance service providers, such as CANTV, Movistar, Digitel, Veninfotel, New Global Telecom, Entel, Multiphone, LD Telecom, Convergia and Intercall; wireless service providers, such as Movilnet, Movistar, and Digitel; data transmission service providers, such as CANTV, Movistar, New Global Telecom, Totalcom, Impsat, Comsat, Bantel, NetUno, Procedatos, Satelca, Genesis Telecom Equant and Charter International; Internet service providers, such as CANTV.Net, Movistar, Etheron, Genesis Telecom, New Global Telecom, Totalcom, NetUno, Procedatos, Impsat, Equant, Comsat, Charter International, SuperCable ALK Internacional (SuperCable), Corporación Telemic (Intercable), Centro Nacional de Tecnologías de Información (CNTI), a civil association under the direction of the Ministry of Science and Technology, IFX Networks, Daycohost and Viptel Communications (Viptel); paging operators, such as Telemensajes Metropolitanos and TeleKontacto; trunking service providers, such as Movistar, Procedatos, Satelca, Americatel, Radio Móvil Digital, Comunicaciones Móviles EDC (Conmóvil) and Evcon; and Cable TV operators, such as SuperCable, NetUno, Intercable, Cablevisión and DirecTV. In July 2004, Venezuela's President, Hugo Chavez, announced plans to establish a state-owned telecommunications company that would provide fibre-optic telephone and data services to the local market dominated by CANTV (fixed-line and Internet services) and Telcel (mobile services). The new company would be 100% government-owned and affiliated with the state holding Corporacion Venezolana de Guayana (CVG), which runs the country's basic industries including aluminium and steel production, gold mining, and most of its hydroelectricity generation. In 2006, CVG Telecom, as the company came to be called, had obtained the relevant administrative licences from CONATEL and was negotiating interconnection rates/agreements with CANTV. CVG Telecom was formally incorporated at the beginning of 2007, at which time it adopted the Telecom Venezuela name. For a decade, the cellular telephony sector was served by just two operators - BellSouth-owned Telcel (later acquired by Telefonica Moviles of Spain) and CANTV-owned Movilnet. Three new operators were licensed between 1999 and 2001, these being Digitel, Infonet, and Digicel; however, only Digitel has made any real impact on the market and its presence will become somewhat stronger when it completes a merger with Infonet and Digicel later in 2006 or early-2007. The resulting entity will be 66%-owned by Oswaldo Cisneros, with other local investors owning the remainder. In 2006, Telefonos de Mexico and America Movil agreed to take control of CANTV from Verizon Communications, but this plan was derailed by the re-elected Chavez government's scheme to renationalise a number of privatised former state utilities, under the pretext that the companies had been paying only lip service to their network roll out and service provision goals and that funds that should have been reinvested in networks and services had instead been used to increase shareholders' dividends. In the face of the government's intractability, Verizon opted to accept US$572 million for its stake, and Telmex and America Movil had to back off from acquiring the company. The government subsequently increased its ownership of CANTV to 86% and there is now a possibility that shares in the company may be listed on the Venezuelan stock market in the near future. Foreign investors would effectively be barred from buying into CANTV.
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