Telefonica de Espana SA’s aspiration to become a leading player in the cable television market in Latin America have received a swiping body blow in the form of strong opposition from the Argentine parliament. In October 1995, El Pais reports, Telefonica Internacional SA signed an agreement to take a 25% stake in Argentine cable television company Multicanal, in which Clarin and Citicorp Equity Investment have holdings of 52.5% and 22.5% respectively (CI No 2,780), but it has now come up against a broadcasting bill which, if approved, could seriously affect its plans in this area. The newly-formed Argentine parliament has begun to debate a bill that seeks to exclude both Telefonica Argentina and Telecom Argentina from providing cable television services, although, on the other hand, the cable companies would be authorized to compete with the operators for basic telephony business, once Telefonica and Telecom’s exclusive contract with the Argentine government expires in 1997. Telefonica Internacional holds 22% of Telefonica Argentina, indisputably one of the jewels in the Spanish operator’s Latin American crown. Argentina currently has 5m cable television subscribers, a figure which, according to government sources, may exceed the number of telephone subscribers. When the Argentine president Carlos Menem visited Madrid in December, managing director of Telefonica German Ancochea took pains to meet him and express his concern for the future of Telefonica Argentina’s investments. Since the Spanish carrier became involved in the management of Telefonica Argentina in 1990, the number of telephone lines installed has increased by 77% to 3m. To publicize its cause, Telefonica Argentina has launched a pugnacious press and television campaign, which dismisses the broadcasting bill as arbitrary, discriminatory and contrary to the current and future needs of the country. Unsurprisingly, Telecom Argentina, in which France Telecom and Stet SpA hold stakes, has also spoken out against the bill, claiming that it endangers the modernization of telecommunications in Argentina. Telefonica’s plans for cable television in Latin America are not, however, confined to Argentina: in Chile, Telefonica Internacional has signed an accord with TCI, the Chilean group Claro and the newspaper El Mercurio, while in Peru an agreement is imminent with the owners of the daily El Comercio. Cable Magico, in which Telefonica Internacional has a stake, will join forces with El Comercio in a bid to attract 75,000 cable television subscribers in the next 16 to 18 months.
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