Telecom Argentina has agreed to merge its operations with cable TV firm Cablevision.
The resulting entity will be the largest provider of converged telecom and media services in the market, strengthening the position of both firms to compete once Argentina’s proposed regulatory changes come into effect, due for January 2018. The reforms of communications regulation are aimed at boosting competition by creating a more open market.
A joint statement issued by the firms said that bolstering their converged offering would allow them to invest more heavily in mobile and fixed networks, in particular by allowing them to build a high-speed fibre network. This will in turn enable improved capacity, speed and quality.
Telecom Argentina CEO German Vidal said that the merged entity would be a “leading company” for converged services in the market, with a strong quad-play offering comprised of broadband internet, landline, mobile and pay TV services. He added that the deal would “create a company with international standards in quality of service and access to state-of-the-art technology”.
Under the terms of the proposed agreement, Cablevision and its shareholders will own 55% of the combined entity, while Telecom Argentina and its investors will own the remaining 45%. The unit will operate under Telecom Argentina’s Personal brand, which is the market’s third largest operator with a 31% share. The firms are hoping to shore up their position to compete against America Movil’s Claro, which leads the market with a 35% share.
As well as allowing the firms to compete better in the face of Argentina’s forthcoming regulatory reforms, the tie-up will also let the companies meet the increasing demand for quad-play services in the market. The changes being implemented by regulator Enacom allow telecoms and broadcast firms to widen the range of services they can offer. The regulator has also proposed new spectrum auctions to attract investment in the country’s fixed and mobile infrastructure.
The deal is subject to regulatory and shareholder approval.