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Argentine state firm Arsat to run 3G mobile services

Cristina Fernandez Image copyright AP
Image caption Argentina's president Cristina Fernandez has been accused of increasing state control over business

Argentina's government has cancelled a tender for companies to operate parts of its 3G mobile phone network, and said a state-owned operator will run it.

State telecommunications company Arsat will run the parts of the network in question.

Planning minister Julio De Vido said the tender was cancelled over fears of monopolisation by private companies.

He said the government was "fed up of monopolies".

Of five companies that bid for the contract, only one met Argentina's financial requirements, Claro - part of Mexican tycoon Carlos Slim's business empire.

The contract originally put out to tender was to operate 25% of the country's 3G frequencies.

Arsat has been awarded a contract to control 20%.

But Mr De Vido said the government cancelled the tender because it did not want to risk doing anything that "causes a situation in which companies, which maybe today don't have a monopoly as service providers, end up becoming (monopolies)".

No 'takeover'

Among the four other companies that submitted bids were Nextel Holdings Argentina and Telecom Argentina, which is controlled indirectly by Telecom Italia.

But Argentina's mobile phone market is currently operated mainly by those companies, Claro, and Movistar, a part of Telefonica.

Argentina has received some criticism for taking greater control of important national infrastructure in recent months.

In April, it took over the country's main oil business, which was owned by Spain's Repsol, in a move that surprised many.

Mr De Vido said that the decision to award the 3G frequencies contract to Arsat was an effort to bring consumer prices down by adding another operator to the market, "not a state takeover."

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