Telecom Argentina calls conditions for Telefónica unit purchase 'excessive'

Telecom Argentina finds the conditions imposed by the country's antitrust tribunal to approve its purchase of Telefónica's local subsidiary "excessive," stating they do not reflect the industry's competitive reality. The company is now evaluating its next steps.

The Tribunal de Defensa de la Competencia (Antitrust Tribunal) mandated several conditions for Telecom's $1.245 billion acquisition of Telefónica Móviles Argentina (TMA). These include transferring 6 million mobile customers, primarily in Buenos Aires, along with their infrastructure, to a rival company. Additionally, Telecom must relinquish 130 megahertz of radio spectrum.

Further requirements involve divesting 211,400 residential internet subscribers across 28 cities within 18 months, with a possible extension. The tribunal justified these measures by stating that the acquisition, which could have concentrated 70% of telecommunications services under one group, will now result in a market share of only 50%.

Telecom executives indicated they will analyze the ruling's details to decide whether to comply or challenge it. The company's shares fell 2.5% on the Buenos Aires Stock Exchange following the formal notification of the tribunal's decision. Telecom argues that the tribunal failed to consider the global competition and satellite connectivity in the ICT sector, focusing instead on a localized, quantitative analysis.

The acquisition faced objections from Claro, a subsidiary of América Móvil, and Telecentro, both of which provide mobile, internet, and pay-TV services. These companies had raised concerns about market concentration.