Colombia's state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, said Colombia's Constitutional Court cancelled a ruling that had ordered it to pay 109 billion Colombian pesos ($43 million) to Spain's Telefonica SA (TEF).

In 2007, an arbitration panel ordered ETB to pay Telefonica's mobile phone unit as part of a lawsuit over interconnection fees, the company said.

The total amount ETB had to pay to Telefonica rose to COP230 billion because of additional interest. ETB didn't pay Telefonica but had to provision that amount.

Telefonica said in a statement it will appeal the constitutional court's ruling.

ETB is controlled by the city council of Bogota, its shares Thursday opened 5.3% higher at COP675.

-By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44 Ext. 1131; colombia@dowjones.com