UPDATE 2-Ecuador strips America Movil of mobile concession

(Recast, adds analyst's quote, details and byline)

By Alexandra Valencia

QUITO, April 29 (Reuters) - Ecuador stripped America Movil (AMXL.MX: Quote, Profile, Research, Stock Buzz) of a major operating concession on Tuesday, rejecting the Mexican mobile telecom giant's terms for renewing its contract as the leftist government tightens control over the economy.

The failure to strike a deal in negotiations reflected a tougher stance from President Rafael Correa in his drive to rework foreign deals in the oil, mining and telecommunication sectors, analysts said.

America Movil (AMX.N: Quote, Profile, Research, Stock Buzz), the country's largest mobile operator, had been seeking to extend its concession by 15 years, with Ecuador wanting it to pay around $480 million and improve services to clients.

"We did not reach an agreement," Jaime Guerrero, head of the country's telecommunications regulator Senatel, told Reuters. Guerrero said the government will gradually take over the company's concession. Later in a statement the government assured the firm's seven million customers their service will not be disrupted.

"It's a surprise as Correa has so far been tempered in his approach and investors had concluded that his government's bark was worse than its bite, but this is evidence that he plans to follow a different path," said Gianfranco Bertozzi, an analyst with Lehman Brothers in New York.

"I take this as a sign of things to come," he added.

Correa, a leftist former economy minister, had warned that if mobile firms did not meet government expectations in negotiations they could leave the country and their concessions would be offered to other cell-phone operators.