Panama: Telecommunicatie
From Handelswijzer Midden-Amerika
Features of the market
The telecommunications sector's contribution to GDP increased from 2.7 per cent in 1997 to 5.7 per cent in 2006. The sector had a total of 6,562 employees in 2005. The total number of fixed telephone lines in operation has remained virtually constant since the Panamanian telecommunications sector was privatized in 1997, but teledensity fell from 16.4 in 1999 to 14.5 in 2005. In 1998, the network became 100 per cent digital. The number of mobile lines increased at an annual average of 29 per cent during the period 2000-2006, reaching a level of mobile teledensity of 54 per cent in 2006. In 2005, there were 11.6 Internet connections per 100 households, of which 2.5 per cent were broadband connections and 9.1 per cent dial-up connections.
Following the sector's privatization in 1997 and the opening up to competition in 2003, rates have fallen and the quality of services has improved. Basic telephone rates fell sharply after the market was opened up. Average national and international long-distance rates in particular fell by 66 and 94 per cent, respectively, between 2002 and 2006. Mobile telephone rates do not appear to differ significantly from the international average. In general, there has been an improvement in the quality of services. According to the authorities, the number of annual breakdowns per 100 fixed lines fell from 70 per cent in 1998 to 12 per cent in 2005. In mid-2007, the ASEP was developing a project to draw up quality indicators for mobile telephone services.
In 1997, by means of a public invitation to tender, the Government sold 49 per cent of its holding in the State-owned company INTEL, which had a monopoly of local basic and long-distance telephony. This privatization led to the foreign company Cable & Wireless taking over administrative control of the new company and 49 per cent of its shares; the remaining shares are held by the State (49 per cent) and by employees of the new company, Cable & Wireless Panamá S.A. (2 per cent). This company had exclusive rights in local and long-distance telephony until the market was opened up in 2003, when competition was introduced by granting new concessions.
In early 2007, there were, inter alia, 34 local telephony concessionaires in Panama (nine of which were operating in mid-2007), 33 holders of national long-distance concessions (15 in operation), 59 international long-distance concessionaires (16 operating), 20 public telephone concessionaires (four operating), 13 voice circuit leasing concessionaires (13 operating), 94 public Internet concessionaires (19 operating) and two mobile telephony concessionaires (two operating). Many of these concessionaires are companies with foreign capital which provide telephone services in more than one branch.
The companies Cable & Wireless Panamá S.A. and Telefónica Móvil Panamá S.A. share the mobile telephony market. The authorities have indicated, however, that in 2007 the Government plans to begin the process of inviting tenders for two new concessions for the supply of mobile telephony services in 2008. In early 2007, 91 per cent of subscribers had chosen the prepayment model.
Legal framework
As part of its specific commitments in the WTO, Panama undertook to liberalize value-added telecommunications services in two stages. Firstly, one year after Panama's accession to the WTO (in September 1997), foreign companies would be allowed to provide such services in a joint venture with the dominant company. In the second stage, five years after accession, foreign companies would be allowed to provide the services directly. Panama has no other commitment on telecommunications services under the GATS framework.
Responsibility for formulating and implementing policies in the telecommunications sector lies with the Executive, through the Cabinet Council. The ASEP, an autonomous State body is responsible for overseeing companies in the sector, granting concessions and licences for the supply of services, ensuring compliance with quality criteria, and assisting the Consumer Protection and Competition Authority to foster competition in this sector.
Law No. 31 of 8 February 1996, as amended by Law No. 24 of 30 June 1999, lays down the general rules governing the telecommunications sector and its implementing regulations are contained in Executive Decree No. 73 of 9 April 1997. Resolution No. JD-2802 of 11 June 2001 prescribes the specific rules for the supply of basic telephony services. Law No. 17 of 9 July 1991 defines the frequency bands for the supply of mobile telephony services and Executive Decree No. 21 of 12 January 1996 regulates operation of this service. Resolution No. JD-107 of 30 September 1997 approved the National Frequency Allocation Plan.
Law No. 31 of 1996, underpinned by the Constitution, gives the management and control of the electromagnetic spectrum to the State through the ASEP.
As an exception to the general provision in Article 280 of the Constitution, Law No. 31 of 1996 authorizes majority foreign private holdings in the capital of companies providing public telecommunications services in Panama. Foreign companies controlled by the State or with a majority State holding may not, however, obtain direct or indirect majority holdings in Panamanian telecommunications companies. Foreign companies must set up subsidiaries with a local presence in order to operate in Panama.
Call-back in international long-distance traffic is not allowed, with the exception of services involving agreements between a Panamanian concessionaire authorized to provide telephony services and a foreign operator of a public international network involving or allowing the intervention of an operator in order to complete the call.
All concessions for telecommunications services are granted by the ASEP for a period of 20 years, renewable for a further 20 years. Concessions are granted free-of-charge and without a public invitation to tender to any company interested in providing basic telephony services, private networks, resale services, Internet for public use, data transmission and satellite transmission, inter alia, which meets the respective technical criteria. If use of the radio spectrum is not required, the ASEP must grant the concession within 30 working days. If this is not the case, concessions for the radio spectrum are scheduled to be granted three times a year.
Unlike other concessions, those for the supply of mobile telephony services are granted through a public invitation to tender and according to a regime that restricts the number of operators in the market; the Cabinet Council is responsible for granting new concessions, which depend on the economic studies conducted by the ASEP, whose criteria are not defined. Resale services require a concession. The ASEP only grants a concession if the applicant has signed a resale authorization agreement with the concessionaire of the primary service.
The provisions on interconnection are to be found in Title V of Executive Decree No. 73 of 1997. The law obliges concessionaires to interconnect their telecommunications networks with those of other concessionaires that so request. Resolution No. JD-3264 of 27 March 2002 sets out a model interconnection agreement to be used as guidance by the concessionaires. Interconnection agreements signed freely between concessionaires do not require approval by the ASEP. Nevertheless, they must be registered with the ASEP, which in turn must make them available to other concessionaires and the public in general. If no agreement is reached within 120 calendar days of receipt of the interconnection request, either of the parties may ask the ASEP to mediate; mediation has a maximum term of three calendar days. If there is still disagreement, the ASEP must, within 90 days, issue a mandatory interconnection decision with retroactive effect; between 1999 and 2006, 42 per cent of the fixed telephony interconnection agreements were determined through a decision by the ASEP.
Operators in a dominant position must give access to their infrastructure at nondiscriminatory prices and terms. In 2006, the ASEP decided that the concessionaire of the local basic telecommunications service (operator in a dominant position) must include in its network the necessary technical means to provide subscriber loop rental to all concessionaires requesting it. The criteria to be taken into account by the ASEP when determining whether an operator has a dominant position in the market are contained in Resolution No. JD-1334 of 12 April 1999. In Resolution AN No. 566-Telco of 16 January 2007, the ASEP identified those concessionaires in a dominant position for each of the 16 public telecommunications services (according to the ASEP's classification); Cable & Wireless Panamá S.A. was identified as the operator in a dominant position for nine of these services. If it is suspected that telephony companies are adopting predatory or anticompetitive practices, the ASEP must request the Competition Authority to investigate them and impose sanctions. 79. Concessionaires of local basic telephony services must give clients that so request digital portability; in early 2007, the ASEP was examining how to apply digital portability to mobile telephony services.
The charges for telecommunications services supplied in a competitive situation are determined by the concessionaires. Although the competition regime is limited, rates for mobile telephony services are freely set by the two existing concessionaires. In special cases, for example if there are practices restricting competition, the ASEP may impose a tariff regime on the concessionaire, but in practice this has not occurred. If prices rise, concessionaires must publish them 30 days before they come into effect. The law does not allow cross-subsidies among different services and requires the publication of separate accounts for each individual service provided by a concessionaire. Cable & Wireless Panamá S.A. is free to fix the rates for its services, with the exception of prices deemed to be high, for which it must request authorization from the ASEP. In mid-2007, the scheme for controlling prices by means of a ceiling was not in effect.
In mid 2007, a draft law drawn up by the ASEP in order to regulate the supply of the universal telecommunications service was being discussed by the Ministry of the Economy and Finance, the governing authority responsible for putting it before the Legislative Assembly.
There are no taxes on local fixed telephony services or residential Internet access. All international long-distance calls originating and/or invoiced in Panama are, however, subject to an ad valorem levy of 12 per cent of their cost. Mobile telephony services, except for prepaid services, are subject to the ITBMS and the ISC, each at a rate of 5 per cent.
Bron: Organization of American State's Foreign Trade Information System (SICE)
