By Alexandra Ulmer and Eyanir Chinea
CARACAS (Reuters) - Venezuela's telecoms industry was deteriorating because of a scarcity of dollars, putting roaming and mobile internet services at risk, the crisis-hit country's telecoms chamber said on Tuesday.
Telecoms, like almost all sectors of socialist-run Venezuela's battered economy, depend on a strict state allocation of dollars for imports and investments.
But a tumble in oil prices and an economic crisis have restricted the availability of hard currency, causing shortages ranging from iPhones to catheters and flour, and harming investments.
"The scarce allocation of hard currency so far in 2015 is substantially less than the average of previous years, accelerating the process of disinvestment in the sector," the executive committee of the chamber, Casetel, said in an e-mailed response to questions.
Private telecoms companies were owed around $700 million in arrears, Casetel said, whose 35 members include Venezuelan state phone company Cantv and Satellite TV provider DirecTV.
Cell phone coverage can already be patchy or non-existent outside the capital Caracas, internet is slow, and provider Movistar has restricted international calls to 10 countries.
Roaming services and long-distance calls could be further curtailed as providers avoid spending hard currency, Casetel said, which would compound a sense of isolation amid a severe reduction in flights, also caused by the currency crisis.
Network coverage and expansion, data, quality of services, and new technologies could also suffer.
Representatives of state telecommunications regulator Conatel could not immediately be reached for comment.
Telecoms companies were being squeezed by a cocktail of price controls, roaring inflation and restricted access to dollars in Venezuela, where the IMF predicts a 7 percent economic contraction this year.
Many telecoms services were price-fixed, so companies cannot hike rates to keep up with inflation. The bolivar currency was also rapidly depreciating, hurting their bottom line.
Costs, meanwhile, have sky-rocketed amid near-weekly price increases in some sectors, though the central bank has not published data for inflation this year. Economists say the annual figure is likely in triple digits.
"The substantial increases (over 500 percent) in costs in 2015 drastically impact the finances of companies in the sector, which is why we hope for an urgent adjustment of prices in all services," Casetel said.
Demand is strong, with data consumption growing too quickly to keep up with network infrastructure, which will lead to a saturation of networks, the group said.
"It's very hard to predict precisely (what will happen) but it's clear that all these impacts will deepen," Casetel said.
(Writing by Alexandra Ulmer; Editing by Grant McCool)