TI settles with Bolivia for €70m
Telecom Italia (TI) has accepted a $100 million (€72.5m) legal settlement over the forced expropriation of its 50% stake in operator Entel Bolivia.
European holding company ETI, in which TI has a controlling stake, took the compensation in exchange for dropping its international arbitration against the Bolivian state.
TI said the settlement covers compensation for the value of the lost stake as a result of the re-nationalization, as well as legal expenses accrued so far.
The payout is expected to increase the Italian telco’s consolidated profit by around €30 million.
Bolivian president Evo Morales in 2007 ordered TI to sell its half of Entel back to the government, on the grounds that it had accrued millions in fines and unpaid taxes.
Regulator Sittel had issued the fines for failing to meet Entel's service coverage and expansion targets.
Morales claimed that Telecom Italia had reneged on the conditions of its 1996 purchase of half of the company, which involved investing $610 million to double its vale.
Telecom Italia maintained it had been in compliance and had appealed the fines.
Entel had an estimated 68% share of Bolivia's long-distance market, 67% of the mobile market and 90% of the broadband market at around the time of the re-nationalization, according to Point Topic.