Spain-headquartered telecommunications company Telefonica has announced its latest departure from the Latin American market. This time it’s exiting Ecuador.
Telefonica announced late last week that it had reached an agreement with Millicom, which has a strong presence in Latin America, operating under the Tigo brand in several Latin American countries, to sell 100% of the shares of its Ecuador unit Otecel/Movistar Ecuador for US$380 million.
As Reuters points out, the transaction aims to further reduce Telefonica’s exposure to Latin America, after it recently sold its businesses in Uruguay, Peru and Argentina to focus on Spain, Brazil, the UK and Germany.
We reported in May that Telefonica had agreeing to sell its entire stake in its Uruguay operations to Millicom for US$440 million. At the time Telefonica was the second-largest mobile operator in that country with a 29% market share.
April saw the sale of its Peruvian unit, Telefonica del Peru, which in February had filed for bankruptcy protection. The sale was to Argentina's Integra Tec International for about US$1.02 million.
Reuters says the company had to book an accounting loss of approximately US$1.9 billion during the last quarter from its disposals in Peru and Argentina. We discussed the ongoing withdrawal of Telefonica from Latin America in a special feature in May.
The main mobile operators in Ecuador, until now, have been private players Claro and Movistar/Telefonica, and state-owned CNT. Estimates, none of them recent, suggest that CNT had a 17% market share, Claro a 52% market share and Telefonica a 31% market share.
The three telecoms operators are estimated to serve 17.8 million mobile line users in Ecuador, whose population is about 18.3 million.
