QUITO -(Dow Jones via Cellular-news)- President Rafael Correa announced over the weekend that he plans to present a law that won't permit private monopolies in Ecuador.
"We are drafting an anti-monopoly law. If competition is not well applied, it can be a disaster," Correa said in his weekly radio address, referring to telecommunications and cement as target industries for the proposed legislation.
In particular, Correa was referring to competition between Telefonos de Mexico, or Telmex, and state telephone companies, after the Mexican company bought Ecuador Telecom, or Ecutel, in March.
Ecutel, with offices in Quito and Guayaquil, provides wireless telephone, Internet and data-transmission services. Under its new administration, the company could potentially threaten the leading market position held by state companies Andinatel and Pacifictel in the fixed telephone market.
Telmex is controlled by Mexican billionaire Carlos Slim.
"There is a danger that Mr. Slim is monopolizing telecommunications in Latin America; in the case of Ecuador, rest assured that here there is a proud and sovereign government that will not permit private monopolies in fundamental services for the population," said Correa, who also classified the privatization of state companies as a "disaster for the country."
Slim is also present in Ecuador's cellular telephone business through America Movil, which operates in Ecuador as Porta Cellular, the country's main service provider with around 2 million clients.
Correa also criticized the privatization in the mid-1990s of the state cement companies La Cemento Nacional, now owned by Swiss Holcim, and Cementos Selva Alegre, owned by French cement maker Lafarge.
"We must surpass this fallacy, this myth of competition, this myth of privatization. We now have a quasi monopoly; these two companies always act in coordination if not in collusion, and now we have cement that is more expensive than in Europe," Correa said.
The president, however, offered no details about the law he plans to present.
-By Mercedes Alvaro, Dow Jones Newswires; 5939-9728-653; mercedes.alvaro@dowjones.com
(END) Dow Jones Newswires
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