Industry praises Ecuador's telecom law reform

Reforming Ecuador’s telecommunications law to focus on connectivity instead of tax collection is a step in the right direction, an industry representative told BNamericas.

President Guillermo Lasso signed the corresponding decree earlier this week.

The reform “is an important step in moving from an eminently tax collection model to a new model based on connectivity and closing the digital divide,” Jorge Cevallos, president of operators association Asetel, said.

"For the industry, it is a very good reform that contributes to providing legal certainty and regulatory predictability," he added.

The CEO of Ecuadoran provider Puntonet, Katherin Miño Sánchez, already praised Lasso's program during the recent Fiber Connect Latam online event.

A key aspect of the reform is a more restricted definition of total income invoiced and received.

The law originally established a 1% contribution of total income for financing universal service. A subsequent reform, however, established that the funds go directly to the finance ministry.

After the latest reform, annual investment plans or obligations agreed with regulator Arcotel may also count as contribution.

The reform adds the obligation to prepare and approve regulations that facilitate universal service projects paid for in the form of services or investments.

"We fully share the objective of connecting all Ecuadorans, and reforms in this regard facilitate investments and the expansion of service coverage, particularly in rural or uncovered areas," Cevallos said.

SPECTRUM

Spectrum tenders may now also focus on coverage rather than collection of funds.

The reform “will consider the contribution to the economic and social development of the population … to satisfy the public interest, so that the population can count on affordable and quality telecommunications services,” according to the decree.

In January, the ICT ministry received the International Telecommunications Union’s (TCU) evaluation of the 700MHz and 2.5GHz bands, paving the way for the tender.

OTHER MODIFICATIONS

The reform also softens the rules for fines and limits the collection of regulatory obligations to 2.5% of total revenues. Likewise, it specifies which assets can be taken back once a concession ends.

And the reform mandates the elimination of duplicated rules and those that don't add value, which was a request mobile association GSMA made to presidential candidates during the campaign.