file this one under "Who's Next?"

http://www.eldiario.com.ec/noticias-...

(translation: ebear)

Quito. - The president of Ecuador, Rafael Correa, afirmed today that the concessions with the international cellular companies Porta and Movistar will end this year, and that his government is preparing a negotiating strategy so that they pay "that which is due."

"The cellular concessions of Porta and Movistar will end this year. We are not going to allow the robbery of other years, where the State has received 50 million dollars of concessions that are easily worth 700 million dollars, said the Chief of State in his weekly radio program.

Porta, belonging to Mexican tycoon Carlos Slim, is one of three operators providing mobile telephone services in Ecuador, along with the Spanish owned Movistar, and the government owned Alegro.

"We are doing a complete evaluation and a very clear proposal so that the country receives what it is due", said Correa. He added that if those companies do not accept the proposals "que les vaya bonito" [colq. goodbye] and he asked that they give timely notice of their departure to allow their users to switch to another service.

"We are not going to be placed under the blackmail of 'if they don't give the concession we will leave them without service'. No, gentlemen, here one is going to pay to the country that which is due. If they do not want, "que les vaya bonito" [colq. goodbye] and we will make the necessary changes to not harm celular users," he affirmed. EFE

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my comments:

Once again, I'm totally in the dark. Were these concessions way out of line with what you find in other countries starting up their cellular networks? No question Carlos Slim is a sharp operator, but did he really rob the nation, as Correa implies? What were the conditions under which these companies entered Ecuador? Did a previous government decide that it was better to get the service up quickly (with all the economic benefits that implies) and thus offered favorable terms, or did they take advantage of their position to benefit themselves and their foreign investors? A bit of both probably, but there's no way to really tell, because no comparables or hard data are provided - just the usual indignant rhetoric and numbers pulled out of a hat.

You can see where this all leads though. Having already made the major capital investments, Porta and Movistar are now left with two choices. Deal on our terms, or get out. If they leave, will they be paid fair value for their assets, or does Alegro get them at a discount? Not much of a bargaining position is it? Probably they'll stay, but view their investments as stranded assets, thus continue to operate but neither upgrade nor expand, and in the end the whole lot falls to Alegro anyway, who will no doubt run it into the ground.

So, who are the real thieves here? This thing smells like every other "revolution" that happens in this part of the world. First drive out the foreign companies and let the State take over their operations, and when that inevitably fails (big surprise) we "privatize" it out to our own domestic (read friends and family) investors. All for the good of the STATE of course.

Let's see... that's the oil co's, phone co's, TV and radio stations, newspapers, grocery chains, dairy farms, bus operators, and of course mining co's they've now gone after. Did I miss anyone?

So who's next on their hit list? Hey, I know! Lets shut down the electric utilities so we can have a thriving domestic candle industry!

You know, for an economist, this guy displays a glaring lack of understanding of even the most basic economic principles. Right now I have three choices of cell providers, presumably in competition with each other. When this is all over, I'll have only one, it will cost more and give worse service. So how does that benefit the nation?

Can you imagine President Bush going on national television and telling AT&T and Verizon that they're going to have to pay up what they owe the nation, and if they don't like it, then hasta la vista baby? This government is a complete and utter joke.

Personally speaking, if Carlos Slim, or Nextel, or Mickey Goddamn Mouse comes into my area and offers great service at affordable prices, then why the hell should they pay any taxes AT ALL? They just put up a cheap, effecient cellular network for christsake. Everyone's a winner! They already paid their freaking dues! Jezus X... why don't these people GET IT?!!!

ebear