Telecom Argentina
Encyclopedia
Telecom Argentina is the major local telephone company
for the northern part of Argentina
, including the whole of the city of Buenos Aires
. Briefly known as Sociedad Licenciataria Norte S.A., it quickly changed its name, and is usually known as simply Telecom within Argentina.
Telecom Argentina's local telephone market, together with Telefonica de Argentina in the southern part of the country, was part of a duopoly
until October 8, 1999. Telecom also operates mobile phone
service Personal and Internet service provider
Arnet.
most of its state-owned utilities
: power, water, trains, and telecommunications, just to name a few. The monopoly of state-owned phone service ENTel
was split into two territories: France Télécom
was given the "upper half" of the country, from the middle to the north, and Telefónica
was given the southern part. Each company was given an initial 7 year monopoly beginning on November 8, 1990. Initially, other companies were given exclusive licenses for international long distance, as well as cellular phone service.
Its Puerto Madero
headquarters were designed by the American architectural studio of Kohn Pedersen Fox
, and inaugurated on February 18, 1998.
Both local phone companies turned their systems into profitable operations in just a few years, despite the terrible conditions they inherited from ENTel. In the worst years of ENTel, a line activation would take several years. The telephone wiring layout across the country was undocumented. At privatization in 1990, the wait was still 4 years to get new service and 40 days for repair.
Starting off with severe downsizings, Telecom Argentina started to invest into the country, but there was little outside capital investment; rather, a small portion of earnings were reinvested. Years later, all of the phone network was upgraded to a state-of-the-art system, from central telephone exchange
s up to the wires going into homes; by 2005, 98% of the ENTel network infrastructure had been replaced.
Unlike many other privatized companies, Telecom got a inefficient company and turned it into a working, profitable company. In contrast, the train lines (which cost the state roughly US$
1,000,000 per day in losses to operate 30,000 km of railroads), were sold to private corporations, it still cost the state US$
1,000,000 per day in subsidies to operate 1,400 km of railroads.
In 2005, the Bank of New York
was appointed as trustee, registrar and paying and transfer agent for Telecom Argentina's $1.5 billion debt restructuring
, the biggest Argentine debt restructuring to date. The restructure involved the exchange of $
2.8 billion in outstanding debt for newly issued exchange notes and cash, and involved consent requests and instructions for over 1100 creditor
s.
Telecom Personal S.A., owned by Telecom Argentina, is one of only 3 mobile phone companies in Argentina. Personal uses a similar logo to Telecom itself until 4th of November, when they change the logo itself into 9 handwriting logos that can be combined with their nine brand colors (cyan, magenta, yellow, black, pink, violet, dark cyan, brown and blue). Here some examples:
Telecom Personal owns 67.5% of Paraguayan mobile provider Núcleo S.A., which started in 1998 and also does business under the brand name Personal but uses a somewhat different logo.
Telecom Argentina has agreed with Uruguayan state telcom ANTEL
to operate as a reseller of Ancel services in that country. Mexican mobile phone Claro has asked the national telecommunications regulating entity not to allow Personal to arrive to Uruguay.
. Critics also point to the high prices charged by the company, and to the fact that, unlike much of the world, Argentine customers have to pay per minute, rather than a fixed price.
In contrast, defendants of the system point out that the 011 area code (called AMBA, most of Gran Buenos Aires) provides local phone access to five to six million users (15-16% of the total population of the country), making a flat-rate type of service economically impossible.
Due to the lack of long requested flat telephone rates for local calls, specially to connect to Internet
, a lot of users installed ADSL services from Arnet, Telecom's Internet service provider
. The company was heavily criticised when it decided to limit ADSL users to 4 GB per month and charge for extra traffic, a decision which was promptly reversed.
Other critics to the company are centred on the lack of information on their offers, and obscure contracts with prices not including taxes, and other important information.
sold its part of the company to the Argentinian Werthein Group
. As of 2007, current approximate ownership of Telecom Argentina is:
Telephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...
for the northern part of Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, including the whole of the city of Buenos Aires
Buenos Aires
Buenos Aires is the capital and largest city of Argentina, and the second-largest metropolitan area in South America, after São Paulo. It is located on the western shore of the estuary of the Río de la Plata, on the southeastern coast of the South American continent...
. Briefly known as Sociedad Licenciataria Norte S.A., it quickly changed its name, and is usually known as simply Telecom within Argentina.
Telecom Argentina's local telephone market, together with Telefonica de Argentina in the southern part of the country, was part of a duopoly
Duopoly
A true duopoly is a specific type of oligopoly where only two producers exist in one market. In reality, this definition is generally used where only two firms have dominant control over a market...
until October 8, 1999. Telecom also operates mobile phone
Mobile phone
A mobile phone is a device which can make and receive telephone calls over a radio link whilst moving around a wide geographic area. It does so by connecting to a cellular network provided by a mobile network operator...
service Personal and Internet service provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
Arnet.
History
In 1990, Argentina started to privatizePrivatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
most of its state-owned utilities
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
: power, water, trains, and telecommunications, just to name a few. The monopoly of state-owned phone service ENTel
ENTel
The Empresa Nacional de Telecomunicaciones was an Argentine state owned company which had the monopoly on public telecommunications in the country until its privatization in 1990.-Overview:...
was split into two territories: France Télécom
France Télécom
France Telecom S.A. is the main telecommunications company in France, the third-largest in Europe and one of the largest in the world. It currently employs about 180,000 people and has 192.7 million customers worldwide . In 2010 the group had revenue of €45.5 billion...
was given the "upper half" of the country, from the middle to the north, and Telefónica
Telefónica
Telefónica, S.A. is a Spanish broadband and telecommunications provider in Europe and Latin America. Operating globally, it is the third largest provider in the world...
was given the southern part. Each company was given an initial 7 year monopoly beginning on November 8, 1990. Initially, other companies were given exclusive licenses for international long distance, as well as cellular phone service.
Its Puerto Madero
Puerto Madero
Puerto Madero, also known within the urban planning community as the Puerto Madero Waterfront, is a barrio of the Argentine capital at Buenos Aires CBD, occupying a significant portion of the Río de la Plata riverbank and representing the latest architectural trends in the city of Buenos...
headquarters were designed by the American architectural studio of Kohn Pedersen Fox
Kohn Pedersen Fox
Kohn Pedersen Fox Associates , an architectural firm responsible for several world-renowned buildings, provides architectural, interior and urban design as well as programming and master planning services for clients in both the public and private sectors...
, and inaugurated on February 18, 1998.
Starting off with severe downsizings, Telecom Argentina started to invest into the country, but there was little outside capital investment; rather, a small portion of earnings were reinvested. Years later, all of the phone network was upgraded to a state-of-the-art system, from central telephone exchange
Telephone exchange
In the field of telecommunications, a telephone exchange or telephone switch is a system of electronic components that connects telephone calls...
s up to the wires going into homes; by 2005, 98% of the ENTel network infrastructure had been replaced.
Unlike many other privatized companies, Telecom got a inefficient company and turned it into a working, profitable company. In contrast, the train lines (which cost the state roughly US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
1,000,000 per day in losses to operate 30,000 km of railroads), were sold to private corporations, it still cost the state US$
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
1,000,000 per day in subsidies to operate 1,400 km of railroads.
In 2005, the Bank of New York
Bank of New York
The Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007...
was appointed as trustee, registrar and paying and transfer agent for Telecom Argentina's $1.5 billion debt restructuring
Argentine debt restructuring
Argentina went through an economic crisis beginning in the mid-1990s, with full recession between 1999 and 2002; though it is debatable whether this crisis has ended, the situation has been more stable, and improving, since 2003....
, the biggest Argentine debt restructuring to date. The restructure involved the exchange of $
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
2.8 billion in outstanding debt for newly issued exchange notes and cash, and involved consent requests and instructions for over 1100 creditor
Creditor
A creditor is a party that has a claim to the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property or service to the second party under the assumption that the second party will return an equivalent property or...
s.
Personal
Telecom Personal owns 67.5% of Paraguayan mobile provider Núcleo S.A., which started in 1998 and also does business under the brand name Personal but uses a somewhat different logo.
Telecom Argentina has agreed with Uruguayan state telcom ANTEL
ANTEL
ANTEL is Uruguay's government-owned telecommunications company, founded in 1974. The company has a monopoly of landline telephony and data services in the country...
to operate as a reseller of Ancel services in that country. Mexican mobile phone Claro has asked the national telecommunications regulating entity not to allow Personal to arrive to Uruguay.
Criticism
Critics of Telecom argue that, when it received government subsidies to provide service in remote areas, it either didn't provide the service, or just installed public telephonesPayphone
A payphone or pay phone is a public telephone, often located in a phone booth or a privacy hood, with pre-payment by inserting money , a credit or debit card, or a telephone card....
. Critics also point to the high prices charged by the company, and to the fact that, unlike much of the world, Argentine customers have to pay per minute, rather than a fixed price.
In contrast, defendants of the system point out that the 011 area code (called AMBA, most of Gran Buenos Aires) provides local phone access to five to six million users (15-16% of the total population of the country), making a flat-rate type of service economically impossible.
Due to the lack of long requested flat telephone rates for local calls, specially to connect to Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
, a lot of users installed ADSL services from Arnet, Telecom's Internet service provider
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
. The company was heavily criticised when it decided to limit ADSL users to 4 GB per month and charge for extra traffic, a decision which was promptly reversed.
Other critics to the company are centred on the lack of information on their offers, and obscure contracts with prices not including taxes, and other important information.
Ownership
France TélécomFrance Télécom
France Telecom S.A. is the main telecommunications company in France, the third-largest in Europe and one of the largest in the world. It currently employs about 180,000 people and has 192.7 million customers worldwide . In 2010 the group had revenue of €45.5 billion...
sold its part of the company to the Argentinian Werthein Group
Werthein Family
The Wertheins are an important Jewish family of entrepreneurs in Argentina.The Werthein family, headed by Leon Werthein, his wife Raquel and five of their children emigrated to Argentina from Bessarabia in 1904, and settled in Riglos, Province of La Pampa....
. As of 2007, current approximate ownership of Telecom Argentina is:
- 54.74% by Nortel Inversora S.A., itself a consortium made up of:
- Werthein GroupWerthein FamilyThe Wertheins are an important Jewish family of entrepreneurs in Argentina.The Werthein family, headed by Leon Werthein, his wife Raquel and five of their children emigrated to Argentina from Bessarabia in 1904, and settled in Riglos, Province of La Pampa....
(48%) - Telecom ItaliaTelecom ItaliaTelecom Italia is the largest Italian telecommunications company, also active in the media and manufacturing industries. Now a private concern listed on the Borsa Italiana, it was founded in 1994 by the merger of several state-owned telecommunications companies, the most important of which was...
group (50%) - France TélécomFrance TélécomFrance Telecom S.A. is the main telecommunications company in France, the third-largest in Europe and one of the largest in the world. It currently employs about 180,000 people and has 192.7 million customers worldwide . In 2010 the group had revenue of €45.5 billion...
group (2%)
- Werthein Group
- 41.5% publicly traded
- 4.21% employee stock ownership program
External links
- Telecom official sites:
- Telecom Argentina S.A. corporate information - English language version
- Arnet - Telecom's Internet service providerInternet service providerAn Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
operation - Personal - Telecom's mobile service
- Information Technology in Argentina: Privitization and Deregulation - overview of the Argentine telephone system as of 1997
- Datafile of Latin America Telecommunications - entry for Argentina
- France Telecom divests its stakes in Argentina and El Salvador - press release