September 27, 2004
Venezuela to invest $25 mln in state telecoms cable
(Reuters) - "One of the state shareholders of Venezuela's newly formed telecommunications company CVG-Telecom will invest $25 million to install 800 miles (1,300km) of fibre optic cable in the first stage of development of the new venture, its president said.

A tender would be opened shortly for national firms to bid to supply and lay the cable by November or December next year, said Daniel Machado, president of state electricity provider CVG-Edelca. CVG-Edelca holds 40 percent of the new state telecommunications company, CVG-Telecom, created Sept. 14.

The planned investment would complement 762 miles (1,228 km) of fiber optic cable already in place as part of the state national electricity network run by CVG-Edelca.

'This will allow us to string Edelca's entire network with fibre optic,' Machado told Reuters.

The cable will form the backbone of CVG-Telecom, which will start operations as a national voice and data carrier for existing telecoms providers.

State industrial holding Corporación Venezolana de Guayana (CVG) controls 60 percent of the new company, which enters a local telecoms market dominated by two foreign-controlled private firms, CANTV and Telcel.

While offering carrier services almost immediately, CVG-Telecom has said it will invest separately $35.5 million over the next 18 months to create three metropolitan networks serving centers like Greater Caracas, the central industrial hub of Valencia and Barcelona in the east.

It would also seek to link up more isolated rural areas.
The company plans to diversify over the next decade into offering commercial phone, Internet and cable TV services.

Venezuela's telecoms market was opened up to the private sector more than a decade ago.
CANTV, which was privatised in 1991 and is controlled by U.S.-based Verizon Communications, leads the domestic fixed-line phone and Internet market. (…)

CVG officials have dismissed fears expressed by some private sector experts that the state company will be an unfair competitor in the local telecoms market. They insist CVG-Telecom will pay the same taxes and be subject to the same national regulations as other providers".