Venezuela- Rural Mobile Licensing



Editor’s Note:


The following information was reported in ITU Trends in Telecommunications Reform – 2004/05:  Licensing in an Era of Convergence (Geneva:  ITU, 2004), and was adapted from ITU, “Licensing Policy for 3G mobile: Venezuela, 2001” (Geneva:  ITU, 2001), available on-line at:




Venezuela was one of the first countries where mobile subscribers outnumbered fixed-line subscribers. This market development, which occurred as early as 1998, had its roots in an event that occurred 10 years earlier, when the state-owned telecommunication company CANTV introduced the first AMPS network in the country – and, in fact, in all of Latin America.  In 1991, another national AMPS licence was auctioned to Telcel in the 800 MHz band, introducing competition in the Venezuelan telecommunication market.  The licences of both CANTV and Telcel included requirements to provide coverage to the 40 largest cities (reaching at least 100,000 subscribers) within three years after being granted.  As it happened, sharp demand allowed the carriers to exceed those mandates.


The two carriers – along with Venezuela’s fixed-line incumbent – largely concentrated network construction in urban centres, however, and neglected rural areas.  In a drive to establish universal service nationwide, the government decided to grant three new mobile service licences – one in each of three regions.  In 1997, the three licences were awarded to Digitel, Infonet and Digicel following a comparative bid process that focused on technical, economic, and legal criteria.  These carriers were permitted to provide basic residential and public telephony in rural communities, which were defined as areas with 5,000 or fewer people.  Within their service areas the winning bidders could provide mobile telephony, paging, private network services, data and value-added services, satellite communications, vehicle localization, and telemedicine.  The rural carriers have expanded their networks to cover more than 75 per cent of the population in the three regions.




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