Last year the Colombian Congress issued Law 555 of 2000 whereby it established the general terms and conditions that would rule the process for granting the concession for the rendering of Personal Communication Services (PCS) in Colombia.

The subject matter of the above-mentioned law was further developed by the Colombian Government in Document Conpes 3118 of 4 June 2001, which was presented for its approval to the National Council of Economic and Social Policy (i.e. in compliance with the terms of said Law 555).

This document contains specific policies and recommendations from the Colombian Government regarding the concession of PCS, which may be summarized as follows:

a. The bid process whereby PCS concessions would be awarded should begin as soon as possible taking into account that (i) the telecommunication market is growing, (ii) the process for granting PCS concessions of almost all Latin-American countries would only begin around the end of year 2001 or within the first days of year 2002, and (iii) it would not be convenient to match up this process with new concessions (concessions that would also be granted by the Ministry of Communications 3 years after the entry into force of Law 555).

b. The following would be the basic terms and conditions of the bid process for granting the PCS concessions:

(i) The Colombian Territory will be divided in three areas (West, East and North). However, the Ministry of Communications is considering the possibility of granting the concession for rendering PCS services in more than one area to a single bidder.

(ii) The concession would be granted by means of a bid process which will have three phases, to wit:

(1) In phase 1 interested parties or bidders should present to the Ministry of Communications the documents necessary to evidence their experience and their technical and financial capacity as required in the "Terms of Reference" document to be issued by said entity.

(2) In phase 2 the bidders must present there first economic offer in a closed envelope.

(3) During phase 3, the bidders (which have complied with the requirements set forth in the preceding phases) would be able to improve their economic offers, with new improved offers and the best offer at the time the biding stage of the process is completed will be the winner.

c. Every offer for the assignment of frequencies for the operation of PCS must include an "Obligatory Minimum Expansion Plan" aimed mainly at low income municipalities. This requirement is expressly established in Law 555 of 2000 as well.

d. The minimum price for qualifying as eligible for being awarded the Concession would be determined by the Ministry of Communications and its advising team. For this purpose the Ministry would have to take into account (i) the Colombian market current conditions, and (ii) the safeguard of fair competition in the mobile telecommunication market.

Based on the above document the Colombian Government recommends to CONPES to:

1. Approve the politics mentioned in the document to which reference was made above.

2. Approve the commencement of the Bid Process for granting the concession for the rendering of Personal Communication Services (PCS) in Colombia.

3. Approve the biding procedure described in this document.

4. Instruct the Ministry of Communications to:

a. Issue the relevant bid process documents including the "Terms of Reference".

b. Prepare and implement a national and international strategy in order to promote the Bidding Process amongst the best qualified national and international investors.

c. Define the conditions of the "Obligatory Minimum Expansion Plan" mentioned above.

5. Instruct the "Commission of Regulation of Telecommunications" to issue the relevant documents for this process, such as the basic technical plan and the interconnection regime.

This report was prepared and is copyrighted in 2001 by PARRA, RODRÍGUEZ & CAVELIER, a law firm with offices in Bogotá, Colombia. The general information herein contained does not constitute legal advice. Transcriptions and quotes are permitted citing the source.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.