The Argentine government announced that it will investigate the acquisition of Telefónica by Telecom to determine whether it creates a monopoly
Telecom Argentina (Telecom) has finalized the acquisition of rival Telefónica de Argentina for $1.245 billion, local press reported.
Telefónica operates in Argentina and other Latin American markets under the Movistar brand. Telefónica Argentina provides, mobile, fixed and value-added services.
The deal was confirmed by Spanish telco Telefónica in a regulatory filing to Spain’s securities regulator detailing that TLH Holdco S.L.U., a subsidiary of Telefónica, sold its entire stake in Telefónica Argentina to Telecom Argentina. The transaction is part of Telefónica’s strategy to gradually reduce its exposure in Latin America.
However, the Argentine government announced that it will investigate the acquisition to determine whether it creates a monopoly. The Office of the President released a statement on social media, warning that “70% of telecommunications services would be controlled by a single economic group, creating a monopoly formed thanks to decades of state benefits.”
“The current regulatory framework establishes a system of control over transfers, assignments, and acquisitions of telecommunications service providers. The National Government is committed to preventing the formation of a new monopoly created through decades of state benefits, which would go against free competition and hinder the disinflation process,” it added.
“Telecom acquired the Argentine subsidiary of Telefónica in an intense and rigorous competitive process. In this way, Telecom will continue to develop the country’s digital infrastructure and increase fixed and mobile broadband coverage, and the deployment of fiber optics and 5G will be accelerated. Thus, Argentina will have a digital infrastructure of international level and quality, promoting the development of important sectors of the economy,” the telco said in a statement.
“In the coming years, intensive capital investments will be added, with a focus on the deployment and capillarity of fiber optics throughout the territory, on the deployment of 5G mobile sites in the same areas and on the expansion of value-added services such as video on demand, the Internet of Things, corporate products, fintech, e-commerce, artificial intelligence and cloud services,” Telecom added.
The company secured initial financing of $1.17 billion from BBVA, Deutsche Bank, Santander, and ICBC, according to the reports.
The reports stated that other companies that were interested in the acquisition of Telefónica’s local business were DirecTV, Telecentro, Liberty Global, Claro and Alpha Media.
The sale must now be reviewed by Argentina’s telecommunications services watchdog ENACOM and the National Commission for the Defense of Competition (CNDC). ENACOM has already stated that regulatory measures are in place to prevent monopolistic structures, emphasizing the importance of ensuring market competition.
If approved, Telecom would significantly expand its market presence, serving more than 41 million mobile customers — dominating two-thirds of the sector, with Claro as its primary competitor.
Recent press reports stated that Telefónica was also seeking to sell its operations in Mexico and Colombia.
