Spanish telecom giant Telefónica announced the sale of its Argentine subsidiary, Telefónica Móviles Argentina, to Telecom Argentina for USD 1.245 billion (approximately €1.2 billion).
The transaction, finalized on the same day as the announcement, marks a significant step in Telefónica's ongoing strategy to reduce its exposure to Latin America—a region it has been scaling back from since 2019—to focus on more profitable markets and fund 5G investments.
This sale follows Telefónica’s broader retreat from Latin America, including recent moves like filing for bankruptcy protection for its Peruvian unit and reported plans to divest assets in Mexico and Colombia.
As the first major corporate move under new CEO Marc Murtra, who succeeded José María Álvarez-Pallete in January, the deal led to a 1.7% increase in Telefónica’s shares during early trading on the Madrid Stock Exchange, indicating strong market approval.
Strategic Investment Sparks Government Scrutiny
Telecom Argentina, partially owned by the Clarín Group, acquired the unit to strengthen its technological infrastructure and accelerate 5G and fiber optic rollouts in Argentina. The company highlighted the acquisition as a commitment to enhancing service quality and nationwide connectivity.
However, the deal has sparked concerns in Argentina, where President Javier Milei’s administration quickly announced it would review the transaction for potential monopolistic implications. Critics, including Milei’s office, warn that it could consolidate 70% of the country’s telecom services under one entity, prompting calls for regulatory oversight.
For Telecom Argentina, the acquisition aligns with its strategy of investing in the local market, leveraging the complementary strengths of both companies’ customer bases and geographic reach to strengthen its competitive edge.
The deal highlights shifting dynamics in the global telecom industry, balancing profitability with regional presence amid economic and regulatory challenges.
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