Argentinian govt issues price freeze on ‘essential’ connectivity, telcos furious

Nobody can deny that connectivity has been central to the continuity of our lives during the coronavirus, but would you consider it ‘essential’? The Argentinian government has done just that, on Friday issuing a decree of necessity and urgency that pronounces internet, mobile, and pay-TV services as ‘essential’ and bans providers from raising their prices until the end of the year.

 

This policy is in fact a continuation of special measures that the Argentinian government took back in May, when it asked operators to fix their prices until August.

 

The telecoms sector is not the only industry to see such price fixes, with around 2,000 goods and services also subject to government freezes this year. These moves come as the Argentinian economy continues to struggle with debt and inflation – even before the coronavirus pandemic hit struck at the start of 2020, the country was operating at a 53.8% inflation rate, with national debt topping $300 billion.

 

While the service price freezes will likely come as a relief to customers, protecting them from planned price hikes, the telcos are far less enthused and are today calling for the decree to be reconsidered.

 

"Such untimely and inconsistent rule change produces a profound negative impact for all the actors in the ICT sector, investors, its hundreds of thousands of employees throughout the country, in its value chain and throughout the digital community, transferring uncertainty to the customers about the quality of the provision of the services they receive in the future,” said a joint statement signed by companies including Telefonica, Huawei, and the GSMA.

 

The statement further argued that such measures would stifle competition and innovation by removing incentives, as well as working to hamstring the operators’ attempts to bring connectivity to the country. They hope that the decree will be repealed, with an alternative strategy developed in direct collaboration with the industry itself.

 

“We request that the decree be reconsidered and a frank dialogue re-established in which all parties find the way to connect Argentines and continue to develop an industry with high added value, generating legitimate jobs, and with enormous potential for the country and its people,” the statement closed.