Government Policies
Bolivia has experienced a dramatic shift in its national technology policies since the decision to privatize the previously state-run telecommunications industry in 1995. The Ministry of Economic Development and the Vice-Ministry of Telecommunications maintains responsibility for formulating telecommunications policy.
Bolivia’s policy requiring investors seeking to take over a part of the newly privatized telecommunications industry to invest heavily into the country’s telecommunications infrastructure, has been handled consistently and successfully. STET International, an Italian telephony firm, purchased ENTEL, the company offering long distance and international telephony in Bolivia, in 1995 for US $650 million. In order to purchase ENTEL, STET International agreed to invest its 50% bid amount into upgrading Bolivia’s telecommunications infrastructure. In return ENTEL was granted its monopoly on long-distance and international service through 2001. ENTEL is not permitted to provide local telephone services except in rural areas not covered by cooperatives.
Local telephone service in Bolivia is offered by local cooperatives instead of a single national carrier or private investor owned companies. The three largest cooperatives located in La Paz, Santa Cruz, and Cochabamba control almost 86% of the country’s local telephony. These cooperatives were given a 6-year monopoly if they, like ENTEL, agreed to upgrade their telecommunications infrastructures. Unfortunately, most have been unable to upgrade and modernize their systems due to a lack of financing. Thus, while the government has supported the cooperative business model, the local cooperatives may experience serious competition once the restraints on their current monopolies give way in 2001.
Bolivia also has cellular, paging, satellite and cable services. There are two cellular operators: Telecel and ENTEL-Movil. Both agreed to invest heavily into the country prior to obtaining licenses to operate.
