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Peru

Peru Slaps Phone Company With A Hefty Service Charge Of Its Own

Despite its huge market share in Peru, Spanish cell phone provider Movistar wanted a free ride on renewing its operating licenses. Peruvian authorities have handed the telecom giant a bill of nearly a billion bucks.

*NEWSBITES

Authorities in Peru have slapped Movistar, a cell phone operator, with an $830-million bill, urging the Spanish multinational to pay up or ship out. According to Ospitel, a telecommunications supervisory organization, that's what Movistar Peru owes for continuing to use two bandwidths after the company's operating licenses expired earlier this year.

The pricey phone bill hit Movistar like a cold bucket of water. Outraged, the company insists the concession renewal should be free. "The contracts didn't include anything about having to pay once the 20-year concessions expired," says Carlos Huamán, the executive director of consulting firm DN Consultores. "That's because the government at the time was only interested in attracting investment for the sectors that were to be privatized."

Huamán explains, however, that the 50 Mhz in question are indeed of great value to Movistar. Just two years ago, the same company paid $220 million to renew its concessions in Ecuador. And it did so without raising prices for consumers.

"The Ecuadorian and Peruvian markets are similar in the sense that in both places, just two operators control roughly 95% of the market," says Huamán. "What Movistar agreed to pay there was about right considering the scale of business it does there."

Nevertheless, Movistar's spokespeople insist that in the case of Peru, the cost of renewing its concessions should be zero – for the simple fact that the terms and conditions of the original contract included nothing about renewal fees.

Read more from AméricaEconomía in Spanish

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*Newsbites are digest items, not direct translations

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Geopolitics

China v. India: A New Twist In Asia's "Billion Club" Rivalry

The news that China's population has shrunk for the first time in 60 years, comes as India appears to be outperforming its giant neighbor on a number of fronts. But this would be reversal of fortune still has too many variables to predict the demise of one or the rise of the other.

Photo of a crowded street in Hyderabad, India

Street scene in Hyderabad, India

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-Analysis-

PARIS — China and India have at least one notable feature in common: the Asian giants are the only two countries in the world with a population above one billion. Yet Beijing announced this week that China has registered its first decline in number of inhabitants after 60 years of continuous expansion. This comes as India’s population continues to grow — on the path to overtake China as the world's most populous country.

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