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QUITO (Reuters) – Ecuador’s government on Tuesday said it will extend its contract with Mexican telecommunications giant America Movil (NYSE:AMX) for a mobile phone concession until a new contract is signed.
America Movil’s subsidiary Conecel, which was not available for immediate comment, will pay $3.3 million per month during the extension period, Ecuador’s government said.
The decision by President Guillermo Lasso came as Ecuadoreans prepare to vote in a runoff election in October for his successor.
Conecel signed a concession with Ecuador in 2008 to operate its mobile telephony market until Aug. 26, 2023 with hundreds of millions of dollars in planned investments. The extension takes effect on Aug. 27.
“The extension will be valid until the newly renegotiated contract is signed, which is estimated to take approximately six months,” Minister of Telecommunications Vianna Maino told journalists in Quito.
Conecel, which trades under the brand Claro in Ecuador, has a 52% market share of country’s telecommunications sector, with some 9.2 million subscribers.
The new contract will run for 15 years, Maino said, adding the parties are evaluating the final value and new conditions.
Ecuador is also reviewing a possible contract extension with Telefonica (NYSE:TEF), Maino said. That contract is due to expire in November 2023.
America Movil also pledged in August 2019 to invest close to $500 million in Ecuador over three years, to develop its services in the country.
