Telecom Italia expects to settle Bolivian suit

Telecom Italia is confident that a solution to a dispute with the Bolivian government over the nationalization of former subsidiary Entel will be reached in early 2009, a Dow Jones report said.

The Dow Jones report quoted Oscar Cicchetti, Telecom Italia's head of domestic market operations and international affairs, saying that he expects an arbitration court to be appointed by the end of September to decide on Telecom Italia's request for compensation.

'We are confident the legal dispute will be solved in the near term "&brkbar; possibly early next year,' Cicchetti said, adding that Telecom Italia is open to either an economic or an industrial solution.

Entel, which was 50%owned by Telecom Italia, is the largest telecommunications company in Bolivia, with a 48% share in the long distance market and 49% stake of mobile telephone services. Its mobile network covers 74% of the Bolivian population.

As part of a drive by leftist President Evo Morales to return key economic sectors to state control, Bolivia announced a government takeover of Entel in May, claiming Telecom Italia failed to meet investment commitments and owed the state millions of dollars in fines and taxes.

Telecom Italia has always rejected accusations and has asked the World Bank International Center for Settlement of Investment Disputes (ICSID) to arbitrate in the dispute with Bolivia over compensation for the state takeover.