MercoPress. South Atlantic News Agency

Argentine gov't steps in as Telefónica's buy-over results in possible monopoly

The acquisition leaves around 70% of the communications business in the hands of one group, the Libertarian Government warned

The Argentine Administration of President Javier Milei announced Monday that the buy-over of Telefónica de Argentine by Telecom has been handed over to the National Communications Board (Ente Nacional de Comunicaciones - ENACOM) and the National Competition Defense Commission (Commission Comisión Nacional de Defensa de la Competencia - CNCD) to determine if the move constitutes a monopoly.

”The Ente Nacional de Comunicaciones (ENACOM) and the Comisión Nacional de Defensa de la Competencia (CNCD) will be involved to evaluate if this operation does not constitute the formation of a monopoly,“ said the President's Office in a statement after Grupo Clarín, through Telecom, completed the purchase of Telefónica's Argentine operations for US$ 1.25 billion.

”This acquisition could leave approximately 70% of the telecommunications services in the hands of a single economic group, which would generate a monopoly thanks to decades of state benefits received by said company. If so, the National State will take all pertinent measures to prevent it,“ the declaration went on.

The Libertarian Government noted that the deal would counter free competition and affect Argentina's disinflationary efforts. Milei's administration also underlined its commitment to preventing monopolies and ensuring free competition and user choice in telecommunications services. The government also highlighted its achievement in cutting down inflation in the communications segment from 15.6% in December 2023 to 2.3% in January 2025.

Both Telecom and Telefónica released statements confirming the acquisition, with Telecom planning to enhance the country's digital infrastructure and Telefónica aligning the sale with its strategy of reducing exposure to Latin America.

The government may require Telecom to divest Movistar to prevent an oligopolistic market. ENACOM affirmed the regulatory framework prevents oligopolies and highlighted the importance of both companies in guaranteeing the right to communication and freedom of expression.

”The current regulatory framework establishes a control system on transfers, assignments, and acquisitions of information and communications services licensees, and as it happens in other Western countries, the National Government is committed to avoiding the formation of a new monopoly, which with these characteristics, created in light of decades of state benefits, would go against free competition and would attempt against the disinflationary process that Argentina is going through,” the `Government insisted.