Argentine anti-nepotism decree obliges Arsat head to resign

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Friday, February 2, 2018

Rodrigo de Loredo, president of state-owned telco Arsat, will resign from his post following the publication on January 31 of decree 93/2018, which aims to eradicate nepotism in the government, local media reported.

Decree 93/2018 prohibits the appointment of people to positions in the public sector that are related to someone already holding a high position in the government.

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The decree states that anyone in those conditions should resign from their post before February 28. De Loredo is the son-in-law of Oscar Aguad, current defense minister and former communications minister.

Despite having resounding support from the private sector for his work at Arsat, de Loredo was quoted as saying by local television that making "an exception would not have been correct."

In a tweet, Marcelo Tulisi, head of the cable operators and SME internet association (CACPY), expressed his admiration for the work carried out by de Loredo over the last two years.

"The tenure of @arsat @rodrigodeloredo as well as seeing positive economic results continues to meet the objective of eradicating the digital divide and taking digital services to places where the private sector doesn't invest," Tulisi said using the @CacpyArgentina twitter account.

Arsat announced earlier this month that it would invest 3bn pesos US$154mn) in the federal broadband internet plan over the next two years.

This will require installing 550 access points throughout the country to enable cooperatives and SMEs to connect the national fiber backbone Refefo.

In 2017, Arsat invested 1.3bn pesos from the universal services fund to connect 170 nodes and posted a budget surplus. The universal services fund is financed by telecoms operators who discount 1% of their total income to be deposited into the fund.

Arsat was one of the public institutions left alone by President Macri when he came to power in December 2015, which at that point represented an investment of US$800mn in two satellites, and at least US$246mn in Refefo.

Macri has pledged to build and launch a third satellite and invest US$246mn in Refefo.

Arsat has been registering positive operating income since 2016 and expects to end 2017 with Ebitda of 180mn pesos (US$10.5mn). This, as a result of leasing 90% of Arsat-2's capacity in 2016 and now deriving 60% of Refefo's revenue from the private sector.

Under de Loredo's tenure, Arsat obtained landing rights for Paraguay, the US, Canada, and Chile for its Arsat-2 satellite.

For more information on Arsat see BNamericas' Operator Series.