Telecom Italia has won control of Telecom Argentina, but says it won’t be chasing Sprint’s assets in Latin America.
Competition regulators yesterday cleared the Italian incumbent to increase its stake in Telecom Argentina parent Sofora Telecomunicaciones from 50% to 58%, a deal Telecom Italia says will boost its 4Q bottom line by €250 million.
The firms first unveiled the deal in August, after Telecom Italia resolved a long-running dispute with the Werthein Group, its partner in Sofora.
However regulators were concerned the deal could give Telefonica too much sway in Argentina, because the Spanish incumbent operates its own cellco in the south American country, while also owning a stake in Telecom Italia.
Competition regulator’s fears were quelled after Telecom Italia and Telefonica agreed measures “to ensure there will be no influence or participation on the part of Telefonica in any Telecom Italia decision-making process concerning its Argentinean subsidiaries,” the telco explained.
South America is an attractive market for European telcos seeking to break out of their saturated domestic markets.
Telefonica fought a long battle against Portugal Telecom for control of Brasilcel – the holding company that controls mobile carrier Vivo in Brazil – earlier this year, in a bid to realize synergies with its fixed line operator Telesp.
Despite the growing interest in the region, Telecom Italia has denied reports in the Italian press that it is in talks to acquire Sprint Nextel’s operations in Brazil, Argentina and Chile.
The firm said it is not “interested, at present,” in buying the US carrier’s south American businesses in a brief statement yesterday.