Bolivia to Nationalize Top Phone Company

At a Monday news conference in La Paz, Presidential Minister Juan Ramon Quintana announced the formation of a commission to plan for the re-nationalization of the former National Telecommunications Co., now known simply as Entel.

The committee of Cabinet-level ministers will be given 30 days "to move forward with negotiations that will allow us to recover the telecommunications company that is now in the hands of a private business," Quintana said.

Earlier this month, President Evo Morales stopped in Rome on his way to Japan to discuss the possible nationalization of the phone company with the Italian government.

In the mid-1990s, former President Gonzalo Sanchez de Lozada privatized a wide swath of Bolivian industry, including the oil and gas, water, power, railroad and telecommunications sectors, as well as the national airline and pension plan.

The privatization did little to help Bolivia alleviate its grinding poverty, and Morales was elected in 2005 on a pledge return many privatized former government businesses to state control. The president has mentioned Entel as a possible nationalization target since his first months in office.

But Entel, now Bolivia's chief cellular phone and Internet service provider, is widely considered to be the privatization wave's sole success story.

In 1996, the government sold 50 percent of Entel to Stet International, which later merged with Telecom Italia SpA, in exchange for a promise that Italian company would invest $608 million to improve the state company's service.

Earlier this year, company officials said Telecom Italia had invested more than promised to stay ahead of the competition in Bolivia's now deregulated telecommunications market.

Entel now controls 68 percent of Bolivia's long distance market, 67 percent of its cellular phone service, and 90 percent of the rapidly growing Internet market, according to Bolivian regulators.

Entel will be the latest in a string of nationalizations under Morales.

In May, the president issued a surprise decree nationalizing Bolivia's oil and gas industry. Foreign oil companies were eventually permitted to remain in the country after granting the government a larger share of their revenues and ceding control of their Bolivian operations to the state.

In January, Morales wrapped up long-running negotiations in the nationalization of Aguas de Illimani, the La Paz water utility sold to French transnational Suez SA in 1997.

Morales nationalized a tin smelter owned by the Swiss mining company Glencore International AG the following month, and he has expressed his desire to exert more control over Bolivia's mining industry.