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Trouble in Argentina

Argentina’s six telco unions have called for a 72-hour strike from July 11-13. During the last three months there have been several strikes in different industries in Argentina and not just in the telecoms sector. The main reason for these strikes is the increase of the salaries, according to the Price Index.

In the case of the telecoms sector Telefonica has been the company that it has been hit the most, because it is the largest.

Employees are demanding salary increases of 25 per cent but it is not just in terms of receiving more pesos every month but also in the number of working hours. In total in a package including more pesos and less working hours Telefonica proposed recently an increase that represents 18 per cent of the current situation. However it is not clear yet if this increase would be accepted by the syndicates.

The Argentinean government now is involved in general elections campaigns for what it has been a bit out of reaching an agreement between the companies and their employees. It has been only in the last few days that the government seems to be more involved in reaching an agreement. However, while this agreement comes it has been a number of strikes, leading to Telefonica’s employees stop working every 36 hours in AMBA (Buenos Aires’ Metropolitan Area) and Great Buenos Aires and organising ‘stop of work’ in other provinces in Argentina every two or three days. In addition there have been demonstrations outside the telecoms company shops.

Even though the damages have not been quantified a Telefonica’s spokesperson mentioned to Informa that the services have been affected, specially broadband and long distance calls. It is unclear if the mobile services have been affected by these strikes.

Meanwhile, Cointel, a 64.83 per cent shareholder in fixed line operator Telefonica de Argentina, has transferred 11 per cent of social capital and voting power to Movistar – the operating name of Telefonica Moviles Argentina.

The transaction is part of an internal reorganisation of Telefonica Group. “One of the reasons for this reorganisation is the integration carried out by Telefonica Group in 2006, after absorbing its mobile arm Telefonica Moviles, but there were other undisclosed reasons for the reorganisation,” Eva Benguigui, senior analyst, Informa Telecoms & Media told telecoms.com.

“At the same time Telefonica de Argentina agreed the sale of shares representative of an additional 1.14 per cent of social capital and votes that it will become effective in a period of no longer than 60 days,” she said.

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