Category Archives: Economic Crisis

Cellphone Providers In Venezuela Suspend International Calling

Venezuela’s two top cell phone providers have announced a decision to no longer offer international call as the South American nation continues to struggle with hyper-inflation and currency controls instituted by the government.

The nation’s two largest cellular providers, Movistar and Digitel, have in recent times unsuccessfully petitioned the government to raise the rates that they can charge for international calling. Each company states that it is now tens of millions of dollars in debt to foreign calling providers and can no longer offer this most basic of services to economically hard-hit Venezuelans. Some international calling from landlines will still be offered.

With inflation rates in Venezuela projected to hit 500% in 2016, analyst David Osio says that companies have had trouble competing on the world stage as the national government now requires approval for companies to convert the local currency, the bolivar, into U.S. dollars. Mr. Osio thinks the administration itself is running short on dollars as the nation fears economic collapse and residents struggle to afford food and basic necessities like medicine.

The government’s subsidized rates for currency conversion have forced many to go to the black market to convert currency instead, where they can get much more value in bolivars for a single dollar. At the time of Movistar and Digitel’s announcements that they are getting out of the international calling market, at least for the time being, a 4-hour call from Venezuela to Hong Kong cost the caller just 50 cents.