Cablevision-Telecom merger to concentrate unprecedented control over communications in Argentina
The boards of directors of Telecom Argentina, the nation's second-largest mobile phone carrier, and Cablevisión, its largest cable television provider, announced their merger on Friday.
Some 40% of the shares of the new company will remain in the hands of Mexican equity firm Fintech, which already has significant stakes in both Telecom Argentina and Cablevisión. Another 33% will belong to the Clarín Group, the largest media conglomerate in Argentina and a key backer of the right-wing Mauricio Macri administration.
The merger, all but certain to be approved by the Argentine regulators, will give the firm a communications quadruple play - the control of fixed and mobile telecommunications, television, and internet distribution.
Media observers in Argentina have expressed concern over the merger, which, once finalized later this year, will give a single company unprecedented power over the nation's already concentrated telecommunications and information services.
The firm will control an estimated 42% of the fixed telephony market, 34% of mobile telephony, 56% of broadband internet connections, 35% of mobile connections, and 40% of the cable TV market.
Besides its stake in Cablevisión, the Clarín Group is also "the biggest newspaper publisher, owner of leading radio staions and television and cable channels, as well as being a shareholder in (newsprint maker) Papel Prensa, the DyN Agency and pay TV signals," Professor Martín Becerra of the University of Buenos Aires pointed out.
With annual revenue of $3 billion, the Clarín Group is today among the largest telecom businesses in Latin America; 70% of these revenues come from Cablevisión, which the group spun off last year in order to facilitate the Telecom merger.
The group’s growth has historically been driven in no small part by close relations with presidents and dictators who approved successive buyouts of competitors.
President Mauricio Macri, whose narrow victory in 2015 was owed largely to staunch support from Clarín's media outlets, has helped it expand further by privatizing televised football rights (sold to a Fox/Turner/Clarín consortium), by rolling back anti-monopoly regulations, and by allowing it to enter Argentina's 25 million-subscriber mobile phone market with the purchase of Nextel Argentina this January.
Macri was denounced in December by the three leading mobile carriers - Spain's Telefónica, Carlos Slim's América Móvil, and Telecom - for allowing Clarín's Nextel unit free access to 4G networks that had cost $2 billion between them.
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