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Spain's Telefonica (TEF.MC: Quote, Profile, Research) will invest $1 billion in networks and infrastructure in peru between 2006 and 2009, company President Cesar Alierta said on Wednesday.
Telefonica, which controls Telefonica del Peru (TELb.LM: Quote, Profile, Research) (TEF.LM: Quote, Profile, Research), dominates the fixed-line market in the Andean nation.
"We have huge expectations in this country and we're thinking of investing $1 billion in network development and telecoms infrastructure," Alierta told reporters outside government palace in Lima.
Telefonica made the investment pledge as it faces a contract renegotiation with the Peruvian government following efforts by lawmakers to force the company to cut its charges.
Legislators and the government of President Alan Garcia argue that Telefonica charges too much for telephone services in a country where half the population lives on $1 a day and where phone lines are scarce outside Peru's main cities.
Alierta described the initial renegotiation talks as "constructive" and "positive" but declined to comment further.
Shares in Telefonica, which moved into Peru in the mid-1990s with the privatization of two local state telecoms operators, rose 1.5 percent to $54.91 in Lima in afternoon trading.
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