After the proclamation of the Republic a year earlier, and among all the uncertainties, there was one regarding the continuity of the CTNE. The Provisional Government's new Minister of Communications, Diego Martínez Barrio, quickly promoted a bill declaring the awarding of the telephone service illegal, implying expropriation. After months of intense debate and uncertainty, in which many voices were raised in defence of the telephone service compared to the pre-CTNE situation, the company provided the Parliamentary Commission with detailed information on everything it had done, with clear evidence of the company's total commitment to the development of the telephone service in Spain. The matter was finally settled at the end of 1932. In the speech made by the President of the Republic, Manuel Azaña, before the Cortes Constituyentes, he reassured Spaniards on this issue and stated that "the time has come for the Government of the Republic to assume its responsibility in the handling of this matter". Before the end of the year, the government and CTNE reached an agreement. Once the danger of expropriation had passed, a new phase of cooperation with the republican authorities began.
In 1932, international service was extended to Poland, Latvia, Romania, Yugoslavia, Brazil, Colombia, Venezuela, Bermuda, Hawaii, Egypt, South Africa and New Zealand.
In May, CTNE employees and the company put an end to a labour dispute that had led to several months of mobilisations and protests. Both parties signed a new employment contract that improved the employees' working conditions and came into force the following year.
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