On Monday, the government of Libertarian President Javier Milei announced a probe into competition issues after Spanish telecom behemoth Telefonica agreed to sell its Argentine business to Telecom Argentina for $1.2 billion.
In a statement provided to Spanish markets regulator CNMV, Telefonica stated that the deal with the business owned by the Argentine media behemoth Clarin Group is a component of its efforts to “gradually reduce” its exposure in Latin America.
Telecom Argentina, also present in Paraguay and Uruguay, said the acquisition of Telefonica Moviles Argentina would accelerate the rollout of 5G and fibre-optic networks as well as increase broadband and mobile telephone coverage.
“Argentina will have digital infrastructure of international level and quality, boosting the development of important sectors of the economy,” it said in a statement.
But the deal must overcome regulatory hurdles, with Milei’s office announcing that the Argentine communications and competition authorities would assess it.
The acquisition could leave around 70 percent of telecoms services in the hands of one group, “which would generate a monopoly formed thanks to decades of state benefits” that Telecom Argentina enjoyed, Milei’s office said in a statement.
“The national government will take all measures to guarantee users’ right of choice, free competition and access to telecommunications services.”
In an effort to lower its debt and increase profitability, Telefonica has begun a strategic shift towards its major markets in Spain, Britain, Brazil, and Germany.
It recently reached an agreement to give up its Colombian branch and sold its businesses in Guatemala and Costa Rica.
After the Saudi corporation STC acquired a 9.9 percent share in Telefonica in September 2023, the company has been undergoing a difficult time.
In order to protect its “strategic” role of serving the nation’s armed forces, the Spanish government re-entered the group’s capital.
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