LIMA Jan 21 Peru's government on Monday said it
will renew Spanish firm Telefonica's operating license for 18
years despite an ongoing row over unpaid taxes.
Telefonica's 20-year contract to operate in the
Andean country expired in May 2011 and the company, the dominant
telecom in Peru, had asked for its renewal.
The decision comes at the same time as the company is
embroiled in a tax dispute with President Ollanta Humala's
Peru's tax agency says the company owes at least $850
million in taxes and accumulated interest from 2000 and 2001.
The tax dispute hinges on whether Telefonica made investments
that can be used to offset tax liabilities.
The communications minister had previously said the dispute
would not be a factor in deciding on the renewal of Telefonica's
Telefonica, which bought companies in most Latin American
countries in privatization auctions in the 1990s, has been in
Peru since 1994.
Currently, Telefonica's cell phone unit has 61 percent of
Peru's mobile phone market of about 33 million lines, according
to Osiptel, Peru's telecoms regulator.
It is also the dominant firm in Peru's fixed-line phone