The Government of Javier Milei has issued a «preventive measure» this Friday that «suspends the effects of the purchase» of Telefónica’s subsidiary in Argentina by the media group Clarín for 1.245 million dollars (around 1.200 million euros).
Despite the intentions of the Argentine Government, the sale of Telefónica’s subsidiary in the South American country has already been closed and paid, so any regulatory risk will fall on the buyer, as indicated by the telecom when it reported the transaction to the National Securities Market Commission (CNMV) at the end of February.
The measure, carried out through the Secretariat of Industry and Commerce of the Ministry of Economy, is based on the recommendation of the National Commission for the Defense of Competition, which warns that «the merger of both companies would significantly increase their market share,» according to the statement from the Office of the Argentine president.
The resulting participation from the operation, according to the Argentine Government, «would imply a concentration of 61% for the mobile phone market; 69% for fixed telephony; and, regarding residential internet service, in some areas of the country the concentration could reach 80%.»
In this sense, Milei’s Government justifies the decision «to safeguard market transparency and free competition through the preventive measure until a deeper analysis of the reported operation is carried out.»
«Through the measure, the National Government fulfills its obligation to guarantee the rights of users and consumers, as well as to defend competition against any form of market distortion,» the text concluded.
SOLD FOR 1.190 MILLION EUROS
Telefónica sold its subsidiary in Argentina for 1.245 million dollars (around 1.200 million euros) to Telecom Argentina, from the media group Clarín. It was one of the first significant divestments since Marc Mutra took over the presidency of the company on January 18 and is aligned with the Spanish telecom’s strategy to «gradually reduce» its «exposure to Latin America.»
Milei had already threatened to torpedo the sale of Telefónica’s subsidiary in Argentina, citing his defense of free competition and user choice. He pointed out that the acquisition «could leave approximately 70% of telecommunications services in the hands of a single economic group, creating a monopoly formed thanks to decades of state benefits received by said company.»