Claro Colombia to provide US$9.5mn in user compensation for service failure

América Móvil's (NYSE: AMX) Colombian subsidiary Claro Colombia is to voluntarily provide 18.0bn pesos (US$9.46mn) in compensation to users affected by mobile voice service failures which occurred on September 25, the company said in a release. The announcement came as ICT ministry Mintic said that it would investigate to determine the cause of the service failure, and would consider a range of possible actions including economic sanctions, calling on Claro to compensate users, and a service quality improvement plan. "This type of incident can't happen again. The operators, and in this case Claro, must commit to providing the country with good quality services," ICT minister Diego Molano said. The statement from Mintic reflects increasing concern regarding the quality of telecommunications services, which has been at the forefront of the regulatory agenda in Colombia for a number of months. Last month, the ICT ministry fined Claro 5.13bn pesos related to service quality infractions by the operator. Meanwhile, last month Mintic presented measures to improve the quality of mobile services in the country, including the provision of a consumer application allowing users to verify and receive compensation for infractions. Trade regulator SIC is also investigating seven telcos in the country for an alleged failure to present information regarding service improvement plans to authorities, or for presenting inexact or incomplete plans. However, the country's mobile operators' association Asomóvil has fought back against the increasing regulatory pressure related to service quality. Government measures don't address the root of the problem, which is the need to rapidly deploy new infrastructure in order to improve service quality, according to the association's president, Rodrigo Lara, who blamed local government authorities for not allowing telcos to deploy network infrastructure. The number of 3G and 4G connections in Colombia is growing rapidly, reaching 2.62mn at the end of Q1, according to Mintic stats, which will likely put pressure on infrastructure capacity. However, large mobile infrastructure deployments are to be expected in the country in the coming months, as operators will be required to rapidly roll out 4G networks in order to meet the government's ambitious coverage targets.