Argentina Blocks Telecom Megamerger Amid Monopoly Concerns

Argentina's government has suspended Telecom's acquisition of Telefonica's local unit, fearing market monopolization. The $1.245 billion merger, aimed at reducing Telefonica's Latin American stakes, faces scrutiny from the National Commission for the Defense of Competition. Concerns include significant market concentration in mobile, fixed-line, and internet services.

In a decisive move, Argentina's presidential office announced the suspension of Telecom's acquisition of Telefonica's local unit on Friday. The government voiced concerns over potential market monopolization if the proposed merger, valued at $1.245 billion, proceeds.

This sale, part of Telefonica's strategy to scale back its Latin American exposure, drew criticism from President Javier Milei's administration. The suspension will remain effective pending further analysis, following recommendations from the National Commission for the Defense of Competition.

Alarmingly, if allowed, the merger could result in market concentrations of 61% in mobile services, 69% in fixed lines, and up to 80% in residential internet. Despite this, Telecom Argentina remains committed to enhancing the country's telecom infrastructure, focusing on advancing 5G and fiber optics.

(With inputs from agencies.)