Telefonica struck a deal to sell its unit in Argentina to local rival Telecom Argentina for just over $1.2 billion, though the country’s president issued a rapid response announcing the move would be assessed over monopoly fears.
In its brief statement on the sale, Telefonica explained it was part of a group strategy to reduce exposure to the region. Its exit from Argentina and some other markets in Latin America has been the subject of regular media speculation in recent weeks.
Telecom Argentina highlighted a plan to make “intensive capital investments” on fibre and 5G in the coming years, along with “expansion of value-added services” in a stock exchange filing.
Areas where it plans to extend its reach include video on demand, IoT, AI and cloud services, and products for enterprise.
Telecom Argentina indicated as a result of its investments, “Argentina will have a digital infrastructure of international level and quality, boosting the development of key sectors of the economy”.
The deal is being mostly financed by loans.
Telefonica announced the “signing and closing of the transaction took place simultaneously” yesterday (24 February).
Competition
However, in a statement published in newspaper Clarin, the office of Argentina’s President Javier Milei revealed the deal would be investigated by regulators to assess whether it constituted the creation of a monopoly.
“This acquisition could leave approximately 70 per cent of telecommunications services in the hands of a single economic group, which would create a monopoly formed thanks to decades of state benefits received by the company,” it noted.
It added the government would “take all measures to guarantee users’ right to choose, free competition and accessibility to telecommunications services”.
In terms of mobile connections in Q4 2024, GSMA Intelligence placed Telecom Argentina as the second largest with 21.5 million and Telefonica third with 17.5 million.
America Movil’s Claro ranked top on 25.8 million.
Source: Mobile World Live
