The decision of the Telecommunications Regulatory Agency (Arcotel) which suspends for 120 days the negotiation tables that were held between the Government and the telephone companies for the renewal of contracts with Movistar and Claro, raises alarm in the union of telecommunications companies. , analysts as well as users. This is because it is doubtful what could happen if a final decision is not made by August – when the contract with Clara expires – and by November – when it expires with Movistar.

Alberto Acosta, editor weekly analysis, explained that according to the contracts there is no possibility of termination switch and the communication or signal ends, as warned. The service will continue, but an agreement needs to be reached between the companies and the Government. In this sense, it seems irresponsible of the Government to declare that it sits down and does not finish the negotiations that have been going on for at least two years, since the deadlines are kept in the same administration.

Acosta assures that although it is switch telecommunications, such a delay “excludes switch investments”. No company will invest if it is not sure what will happen to the contracts, he explains. It also hinders technological progress and allows the problem to be politicized. For example, he says, candidate Yaku Pérez has already made statements to the effect that these renegotiations could resolve the deficit issue. For Acosta, this is a wrong vision, because it is not important to generate income for the state, but that the contract represents an investment in new technology and more.

According to Acosta Burneo, it should be discussed how to speed up technological progress, expand penetration, expand the concession of the radio spectrum in order to have a higher speed of data transmission. This can only be done if the contract prioritizes investment over revenue for the state treasury. He explains that Ecuador is currently technologically behind, since it does not even have 5G technology, when the world is already talking about 6G.

It is not yet known what the terms of the negotiations that were interrupted are, but he assures that the question of the price of the concession is the least important in the equation. The important thing is the money that companies commit to investing in issuing coverage.

According to Patricia Falconí, executive director of the Association of Telecommunications Companies (Asetel), with Arcotel’s resolution 2023-0097 of May 25, the suspension occurs until all the necessary information is collected, but the continuity of the service. At the moment, there is no clear communication from the Telecommunications Administration that would indicate, for example, that the term of the contract is being extended in addition to the suspension.

Falconí expressed the hope that the processes will speed up and that the negotiations will continue at the table. This will give investors, users and the ecosystem security, he says. “It is important that processes can continue, and Arcotel ensures continuity of service.”

According to Falconí, there is currently no vision that identifies the importance of telecommunications, and every day that passes without accelerating these negotiations and therefore without guaranteeing continuity of service, all Ecuadorians lose.

He believes that after the pandemic, the importance of technology is evident, both for working remotely, as well as for teleeducation, telemedicine, staying in touch with loved ones, and transferring information.

It highlights the activities and efforts of mobile companies that have made this public service the most advanced in more than 30 years. It currently has 78% penetration with 4G services, a service that has managed to reach rural communities with less than 1,000 inhabitants. There is great capillarity in this service, he points out.

For Falconí, the importance of mobile companies can not only be seen in relation to the economic effect for the country, but also in the cascading effect they produce on a social and production level. He explains that World Bank studies show that for every 10% increase in broadband internet penetration, there is a 1.38% increase in GDP and a 2.61% increase in productivity. This last figure is equivalent to 67,000 direct jobs

He explains that telephone companies have generated constant foreign investment and enabled technological development in a few years from 2G to 3G and 4G. It also ensures that consumer rates are reduced and are among the lowest in the region.