Telecom Italia aims to take Bolivia to arbitration

LA PAZ, Oct 24 (Reuters) - Telecom Italia <TLIT.MI confirmed on Wednesday that it had filed a claim seeking international arbitration to block Bolivia's efforts to take over the company's Bolivian subsidiary, Entel.

Telecom Italia unit Euro Telecom International (ETI) said in a statement it filed an arbitration suit at the World Bank's International Center for Settlement of Investment Disputes (ICSID).

That confirmed comments from a high-ranking government official on Tuesday that the Italian company had resorted to international arbitration to halt Bolivia's drive to nationalize Entel.

Leftist President Evo Morales issued a decree in April ordering Telecom Italia to sell part or all of its 50 percent stake in Entel to the Bolivian state.

Telecom Italia initially agreed to meet with the Bolivian government, but talks collapsed when Bolivia refused the company's request to move the negotiations to another country.

In the statement, ETI said it decided to file for international arbitration after Bolivia ignored the company's proposals for an agreement. The last proposal, sent July 31 in a letter to the Bolivian government, "was never answered," the telecoms company said.

ETI said the bid to nationalize Entel violates contractual rules agreed when the Bolivian company was capitalized in 1995.

In May, Bolivia said it was planning to withdraw from the ICSID and a government official accused the institution of favoring multinational companies in its rulings.

Bolivia handed a 50 percent stake in Entel and administrative control to Telecom Italia in the mid 1990s, in exchange for pledges from the Italian company to double Entel's value by investing $610 million.