Argentina OKs Telecom Merger, Requires Asset Sales

Argentina’s competition body the CNDC has given the go-ahead to the planned merger of Telecom Argentina with Cablevision subject to the fulfilment of a number of conditions, including the sale of fixed-line assets in certain areas and a moratorium on the provision of quad-play services.

Telecom Argentina and Grupo Clarin-owned Cablevision announced their all-stock merger almost a year ago, a move designed to create a stronger competitor in the market, particularly with regard to the provision of quadruple-play offerings. Cablevision brings a pay TV asset to the table and a stronger broadband base, while Telecom Argentina owns mobile network operator Telecom Personal.

The proposed merger of a major telecoms player and TV provider naturally raised competition concerns, which the CNDC – or Comisión Nacional de Defensa de la Competencia – has sought to address through its ruling on the deal.

In a statement published on Friday, the CNDC came out in favour of the merger following a lengthy period of research and analysis.

It will allow the deal to go ahead provided the merged entity sells off its fixed broadband business in 28 areas of the country where the merger could affect competition. It also requires the new entity to refrain from launching quad-play offers for a period of between six and 12 months, depending on the region, to prevent it from gaining an advantage from being first to market; rivals will thus have time to invest in quad-play or partner up in order to offer such services.

Telecom Argentina will be compelled to offer a wholesale residential Internet service under a reference offer to enable other providers to launch services.

And finally, the CNDC recommended that regulatory authority (ENACOM) expedite the return of the merged entity’s excess spectrum, which could be as much as 80 MHz, in order to level the playing field.

The merger deal will see Cablevision absorbed by Telecom Argentina, but Cablevision will hold a 55% stake in the merged entity and Telecom Argentina the remaining 45%. Telecom Argentina in November appointed Carlos Moltini, chief executive of Cablevision, as its new CEO. – Total Telecom