Venezuela Plans New Fiber Rollout

Government to launch national service provider to rival private incumbents, says country's president

July 5, 2004

1 Min Read
Venezuela Plans New Fiber Rollout

Here's a tale that bucks the trend in telecom competition. Venezuela plans to launch a state-owned service provider to challenge the incumbent private carriers, with the country's president, Hugo Chavez, pledging hundreds of miles of new fiber construction.

The companies hoping Chavez isn't a man of his word are Compania Anonima Nacional Telefonos de Venezuela (CANTV), the dominant fixed line provider that's 28 percent owned by affilates of Verizon Communications Inc. (NYSE: VZ), and Telcel, which is now part of the global Telefònica Mòviles SA empire (see Telefónica Buys BellSouth Ops).

The Venezuelan government owns 6.6 percent of CANTV's outstanding stock.

Having created a new state-owned telecom firm last year called Covetel (Corporacion Venezolana de Telecomunicaciones), Chavez, who runs a country about twice the size of California with a population of 25 million, announced his intention to take on the incumbents on Sunday during his weekly TV and radio show, "Hello President," according to Reuters.

Chavez said the operator would use the existing 762 miles (1,228 km) of fiber already dug along the national electricity grid, but would build an additional 837 miles to reach all the major parts of the country, though the President didn't reveal how much would be invested in the new infrastructure.

The new carrier might provide television as well as traditional telecom services. Chavez's government has in the past accused private TV companies of unfairly attacking his government.— Ray Le Maistre, International Editor, Boardwatch

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