Argentina's presidential office announced a preventive measure to suspend Telecom's acquisition of Telefonica's local unit, citing concerns that the merger could result in excessive market concentration.
In February, Spanish telecom giant Telefonica announced its intention to sell its Argentine unit to Telecom Argentina for $1.245 billion as part of a strategy to reduce exposure to Latin America. This prompted a commitment from President Javier Milei's government to prevent the emergence of a monopoly.
The suspension will remain in effect until further analysis is conducted. This decision follows a recommendation from the National Commission for the Defense of Competition, which expressed concerns about the merger's impact on market fairness.
The Argentine government indicated that the transaction could result in a market concentration of 61% in the mobile telephone sector, 69% in fixed-line telephony, and up to 80% in residential internet services in certain regions of the country.
Telecom Argentina, which is partially owned by the Argentine media conglomerate Clarin Group, has stated its intention to continue investing in the country's telecom infrastructure, specifically in expanding 5G and fiber optic networks.
Telecom Argentina has not yet responded to requests for comment.