Argentina
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Govt. to revamp universal service measures

Bnamericas Published: Thursday, February 10, 2005
The Argentine government plans to submit to congress a draft bill clarifying the definition of "universal service", so it is clear that the entire population has the right to access paid telephony services, local newspaper La Nación reported. The government believes the best way to boost the development of fixed line telephony is with wireless technology, by promoting the use of unregulated spectrum such as the 450MHz band. "[The technology to implement] should be the operator's decision and it is not convenient to establish technological specifications since in most cases technological evolution does not allow one to forecast which options will be best in the future. It is logical to [first] establish how to finance the service in these areas but later define the technology," local telecoms analyst Enrique Carrier, of Carrier y Asociados, told BNamericas. Personal handyphone technology - where clients' mobile phones only work in a limited area, such as the home - would be ideal for service in rural areas since these telephones do not need last mile cabling, reducing the installation cost by nearly 60% compared to traditional telephony. In Buenos Aires fixed line density reaches 38%, but there are provinces where this index is only 7%. Under the current definition of universal services, telephony operators have the obligation to provide the service, but have been reluctant to do so without government subsidies to cover the financial shortfall they would incur. "Operators entered large urban centers, where there was a large market. Those that entered the market were not willing to invest in low demand areas with slim chances of recovering their investment. But if there is a fund and the state guarantees an income to provide the service, the operator will be able to determine which is the best solution to offer a lucrative service," Carrier said. Argentine operators can contribute to universal service either by paying 1% of their revenues into a government fund or by proving that they are installing service in poorly served areas. "The 2000 market liberalization law established this fund but it was never actually implemented because there was no public organization to administrate it," Carrier added.

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