Following a review by the National Commission for the Defence of Competition (CNDC), the Secretariat of Industry and Commerce (SIyC) issued an official objection to the merger, which would give Telecom Argentina full control of Telefónica's operations in Argentina.
According to the CNDC, the merger would reduce the number of main mobile providers in the country from three to two, leaving Telecom Argentina with about 58% of the market and Claro (AMX) with the remaining 42%.
“Following a preliminary analysis, the CNDC identified significant risks due to the potential effects on competition in multiple telecommunications markets, which could be detrimental to the general economic interest,” a statement noted.
This comes as the merger would put Telecom Argentina over the legal spectrum cap of 140 MHz in all areas, and in some places, the excess could reach 130 MHz.
Additionally, the deal would also impact fixed internet and phone services in 186 locations.
In 114 areas, the telecom giant could control over 40% of the internet market and in 143, it could dominate fixed phone services.
However, some places, including Buenos Aires and parts of the provinces of Mendoza, Neuquén and Río Negro, could see near-monopolies.
The CNDC also flagged concerns that if the merger goes through, Telecom Argentina would become the only company able to offer nationwide packages that include mobile, internet, TV and fixed phone services.
The statement continued: “The SIyC and the CNDC issue an Objection Report when they consider that the notified transaction has the potential to restrict or distort competition in a market in a way that could be detrimental to the general economic interest.
“For this reason, the parties will be convened to a special hearing to analyse possible measures to mitigate the potential negative effects of the merger on competition.”
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