Telecom Argentina and cable-TV company Cablevision agreed a merger they said will create the country’s leading provider of converged telecom and media services, and position them to compete more effectively once planned amendments to telecoms regulations come into force.
In a joint statement, the companies said the combination would enable them to boost investment in mobile and fixed networks – specifically the construction of a high-speed fibre network – with a focus on improving capacity, speed and quality.
German Vidal, CEO of Telecom Argentina, said the merger will create a “leading company” in the converged services sector, offering so-called ‘quadplay’ (pay TV, mobile, landline and broadband Internet) services.
According to GSMA Intelligence, Telecom Argentina’s Personal brand is the third largest mobile operator in the country with a 31 per cent market share.
Terms of the proposed deal would see Cablevision and its shareholders own 55 per cent of the merged entity, with the remainder held by Telecom Argentina and its investors. The combined company will operate under the latter brand.
The companies explained the merger serves two purposes. First, it will enable them to meet growing consumer demand for quadplay services and, second, position the pair to take full advantage of forthcoming changes to communications regulations, which aim to create a more open market.
Argentine market watchdog Enacom in January published guidelines paving the way for telecoms and cable companies to broaden the scope of their services, as part of a wider push to boost competition in the country’s telecoms sector. Also included were plans to call for a spectrum auction, as part of a goal to encourage fresh investment in Argentina’s fixed and mobile infrastructure.
Telecom Argentina and Cablevision said the plan to deliver a more competitive market is due to commence in January 2018.
Vidal said the combination will “create a company with international standards in quality of service and access to state-of-the-art technology”. His company enlisted JP Morgan Securities as its exclusive financial advisor for the deal, which both companies noted must be approved by their respective shareholders along with Argentine competition regulators.
Telecom Argentina will also hope the merger will strengthen its efforts to take on dominant rival Claro (America Movil) in the mobile space (Claro holds a 35 per cent market share).