Telefónica acquisition: the Government will defend free competition and user choice

Following Telecom's purchase of Telefónica de Argentina, an investment of US$1.245 billion, the office of President Javier Milei issued a statement stressing that he will defend free competition and user choice.

The statement said that "based on reports circulating about the potential acquisition of the Telefónica Group by Telecom, part of the Clarín Group, the National Communications Agency (ENACOM) and the National Commission for the Defense of Competition (CNCD) will be called in to assess whether this operation constitutes the formation of a monopoly."

Telefónica had announced its exit from the country in 2019 and was in the process of divestment. On the other hand, this is not the first operation of this type in the country. There have already been others such as the purchase of Movicom, also in a divestment process by Telefónica in 2005. And the acquisition of Telecom Italia by Telefónica de España in 2013 when both had a much higher percentage of the market than they do now.

According to the presidency, this acquisition "could leave approximately 70% of telecommunications services in the hands of a single economic group, which would generate a monopoly formed thanks to decades of state benefits received by said company. If this were the case, the National State would take all pertinent measures to avoid it."

The statement notes that "the current regulatory framework establishes a system of control over transfers, assignments and acquisitions in the case of information and communications, and as occurs 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 threaten the deflationary process that Argentina is going through."

It is thus emphasized that "this Government lowered inflation for the communications segment from 15.6% in December 2023 to 2.3% in January of this year , and is determined to continue this process."

It concludes that "the National Government will take all measures to guarantee the right of choice of users, free competition, and accessibility to telecommunications services."