Ecuador: President defends government’s intention of reforming telecommunications law

Posted on August 5, 2014 • Filed under: Business, Ecuador, Politics reported Ecuadorian President, Rafael Correa defended the Governement´s intention of reforming the Telecommunication Law so that the profits of these companies, benefit all citizens and not just a handful. He also hinted that the Governement will analyse the company profits.

“Why do 4,500 families get 130 million (dollars) of profits based on the use of a natural resource for all Ecuadorians such as the radio spectrum? Does that mean that the company is making too much money ?”Correa said during an interview with the media in Esmeraldas.
The president, who is in town to celebrate the 194 years of independence reported that 15% of profits from telephone companies, that is, around 130 million dollars benefit 4,500 families. With the reform law, the government seeks that 12% of that amount be used for projects and 3% distributed among the employees of these companies.
We have three phone operators in Ecuador: Claro, owned by Mexican billionaire Carlos Slim which controls 62% of the market; the Spanish Telefónica (30%) and state CNT (2.5%).

Employees of Claro and Telefonica have expressed their criticism to the government’s idea.
“They will say again that we are stealing their money, that we hate the middle class. I am middle class, then I hate myself. This happened with the oil sector, employees were under paid; for example, a driver was paid a basic salary, but drivers who had profit sharing received $ 200,000 dollars”, said the president.
Ecuadorian President compared the profits with the cost of a school of the millennium. “A millennium school costs between 4 or 5 million (dollars). We are talking about 26 schools of the millennium. Is it fair that instead of building 26 schools this money be used by 4,500 families instead of each school serving approximately 2,000 students to 50,000 students per year?”.


“Of those 130 million, 12% will be for the development of telecommunications, that means 100 million and 30 million are for those families, I think is a reasonable amount,” said Correa. He added that the government estimates that these resources could create 4,000 computer labs per year. “Social justice and impact will be much greater,” he concluded. Read Article

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