Ecuador's President Rafael Correa warned Mexican telecoms company America Movil that it must improve its second bid to hold onto a mobile operating contract or leave the country.
An Associated Press report quoted Correa in his weekly radio address saying that, 'The first offer they presented us was a real insult to our intelligence. The second isn't as bad, but it's still far from what the concession is really worth.'
America Movil, Latin America's largest mobile phone service provider, is owned by Mexican billionaire Carlos Slim. It has operated in Ecuador since 1993. Its concession expires in August, but two previous, undisclosed offers to renew the contract were rejected by Ecuador's government. America Movil has made no comment on the situation.
In February President Correa announced that local units of America Movil and Spain's Telefonica, which also runs mobile services in Latin America, must pay a combined total of €442 million (US$700 million) to renew operating contracts - 12 times the €36.6 million (US$58 million) they paid for their concessions in the 1990's.
Telefonica agreed to pay €140 million (US$220 million) to extend its contract through to 2023, Correa said before threatening to hold an international auction for America Movil's concession. He added that Slim's company would not be allowed to bid unless it reaches an agreement within the next few weeks.
America Movil's subsidiary, Porta, controls 68.8% of Ecuador's mobile phone market, while Telefonica's Movistar controls 26.8% and state-run Alegro PCS controls 4.4%, the report said.