UPDATE 3-America Movil to pay Ecuador $480 mln to operate

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By Alexandra Valencia

QUITO, May 6 (Reuters) - Telecommunications giant America Movil will pay Ecuador about $480 million to continue operating in the country, marking a win for the leftist government that wants to boost its share of revenues in foreign contracts.

Despite difficult negotiations that appeared to strip the company of its operating concession, America Movil (AMXL.MX)(AMX.N) in a last-ditch offer met the government's goal of $480 million. Last week the Mexican company offered $307 million that Ecuador rejected.

The country's telecommunications chief regulator, Jaime Guerrero, told Reuters the agreement was settled during a meeting between President Rafael Correa and the Mexican company's Chief Executive Daniel Hajj on Monday.

Correa, a leftist who took office last year, has launched a campaign to increase state control over the economy. The former economy minister has pushed foreign oil and mining companies to improve the terms of their contracts.

"Although it is highly unusual to see a demand this high -- and it sets a precedent for other markets that should put fear into the hearts of operators -- the concept is consistent with standard capitalist economic theory," said Wally Swain, an analyst with Yankee Group in Colombia.

"America Movil's original response seemed to be based on non-financial factors -- like long-term concerns about Ecuador as a place to do business," he added.

Spain's Telefonica (TEF.MC) has already reached an agreement with Ecuador to renew its deal for 15 years.

Together, the companies control 95 percent of Ecuador's market of more than 10 million subscribers, though the country represents a small part of both their overall subscriber bases.

America Movil and Telefonica are the two largest mobile phone operators in Latin America and have long fought for supremacy in the region. (Editing by Maureen Bavdek and Tim Dobbyn)