Just for the concession of the radio spectrum, the State expects to receive USD 410 million, according to the Proforma 2024 Justification.
A customer requests information at a service center of the Movistar operator, in Quito.
The State expects to receive USD 560 million in income in 2024 from the renegotiation of contracts with the mobile telephone companies, Claro and Telefónica, operator of the Movistar brand, according to the Proforma 2024 Justification of income and expenses.
“By 2024, it is expected to finalize the concession of the radio spectrum to Otecel (Telefónica) and Conecel (Telefónica), and it is also expected that the negotiation between the State and these two companies will generate income from the renewal and 5G for USD 410 million,” details the Government in that document.
However, the current contract renegotiation does not include the delivery of additional frequency bands for the development of the 5G network. This would be part of another future negotiation process, César Martín, Minister of Telecommunications, clarified to PRIMICIAS, in an interview conducted in December 2023.
Therefore, it is understood that the USD 410 million refers only to the renewal of the concession for the use of the radio spectrum, with the same frequency bands that the operators already use to offer the mobile telephone service.
How much was paid before?
The amount to be paid for the spectrum concession is a crucial aspect of the negotiation. In 2008, when the licenses of the two companies were renewed for 15 years, only Conecel paid the State USD 480 million. While Otecel paid another USD 220 million.
Then, in 2015 there was a new renegotiation of the contracts with the two mobile operators to expand the use of the spectrum in order to develop the 4G network. That implied a new payment by the operators for USD 330 million.
Additionally, companies must make a monthly payment to the State for use of the radio spectrum.
If the amount foreseen in the Proforma is finalized in the negotiation, the State would receive USD 290 million less than in 2008. However, the telecommunications sector has indicated on several occasions that the amount paid in Ecuador for spectrum is one of the highest in the region.
Additional amount
On the other hand, according to the Proforma 2024 income and expense report, the State expects to receive another USD 150 million as a result of the renewal of concession contracts to mobile operators.
Specifically, the document details that the contracts will contain “the terms and conditions of the concession rights”, which the operators must commit to comply with, including the ” improvement of connectivity and reduction of the digital divide.”
“For this concept, income from the renewal of telecommunications concession contracts is estimated for an approximate value of USD 150 million,” says the Government.
