The Argentinian government has again raised concerns over operator Telecom Argentina’s plan to acquire rival Telefónica Móviles Argentina and the possibility of a two-player market. So what happens now?
Following a review by the National Commission for the Defence of Competition (CNDC), the country’s Secretariat of Industry and Commerce (SIyC) has issued an official objection to the merger, warning that the deal, which would give Telecom Argentina full control of Telefónica's operations in Argentina, could seriously harm competition in the telecom sector.
Telefonica provides mobile and fixed telephony, fixed broadband and pay TV services nationwide under the Movistar and Tuenti brands. Telecom operates in the fixed and mobile telephony, high-speed internet access and cable television segments.
One of CNDC’s worries is that the merger will result in the elimination of one of the country's three main mobile phone operators, leaving only two players: Telecom would have about 58% of the market. AMX (Claro), would have 42%. The merger would also put Telecom Argentina over the legal spectrum cap of 140 MHz in all areas.
In addition, however, in 114 areas the telecom giant could control over 40% of the internet market. In 143, it could dominate fixed phone services. However, some parts of the country could see near-monopolies.
In corporate telecommunications services, meanwhile, the combined market share, at over 50%, could be detrimental to competition in a strategic segment, according to CNDC.
Bundled services could also be hit, with Telecom, potentially, the only player able offer nationwide quad-play packages that include mobile telephony, internet, pay TV, and fixed telephony.
Of course, these concerns have been expressed before. In March the US$1.245 billion, deal, agreed in February, was put on hold, apparently by order of Argentina’s government.
As for the next move, it seems a special hearing to analyse possible measures to mitigate the potential negative effects of the merger on competition has been proposed. According to one news source, Telecom has been given fifteen days to present ways to mitigate the risks CNDC has highlighted and present them at the hearing.
