El Salvador: Telefonica's Purchase Conditioned

One of the conditions for authorizing the acquisition is that America Movil must relinquish the right to operate 25 MHz of radio spectrum with national coverage in the 850 MHz band and 30 MHz of radio spectrum with national coverage in the 1900 MHz band, which currently belong to Telefonica.

Wednesday, August 19, 2020

According to the technical, legal and economic analysis carried out, it was warned that the acquisition would result in limitations to competition in the markets for mobile and fixed telephony and business connectivity services. Therefore, the Board of Directors of the Superintendence of Competition (CDSC) decided to impose a set of conditions to repair the damages, which include enforcement measures prior to the closing of the transaction (ex ante) and a series of subsequent obligations (ex post) in order to counteract such limitations, informed the Superintendence of Competition (SC).

You may be interested in "Telefonica Purchase: New Application Accepted"

From the SC's statement:

August 18, 2020. The Board of Directors of the Superintendence of Competition (CDSC) conditioned by majority the approval of the economic concentration in which America Movil, owner of the CLARO brand, seeks to buy the share capital of Telefonica Moviles El Salvador and Telefonica Multiservicios (MOVISTAR), currently owned by Telefonica Centroamérica Inversiones. If CLARO complies with the conditions, it may execute the purchase, otherwise it will be deemed to have been denied. Compliance with the conditions imposed by the SC is required for the concentration to be carried out and to allow competition to be effectively maintained in the sector.

According to the technical, legal and economic analysis carried out, it was warned that the acquisition would lead to limitations on competition in the markets for mobile and fixed telephony and business connectivity services. Therefore, the CDSC decided to impose a set of conditions to remedy the damages, including pre-closing (ex-ante) enforcement measures and a set of post-closing (ex-post) obligations to counteract such limitations.

Through its decision, the CDSC seeks to restore the competitive pressures lost as a result of the merger, to protect the welfare of consumers and to ensure that levels of competition in the market are not reduced with the exit of MOVISTAR (which generated significant competitive pressures in various telecommunications services).

Read full article (In Spanish).



More on this topic

El Salvador: Telefonica's Sale Cancelled

September 2020

As a result of the conditions imposed by the Superintendence of Competition to carry out the operation, América Movil and Telefónica decided to cancel the agreement to purchase 99.3% of Telefonica Moviles El Salvador.

According to the technical, legal and economic analysis carried out by the Superintendence of Competition SC, it was warned that the acquisition would produce limitations to competition in the markets of mobile and fixed telephony and business connectivity services.

Telefonica Purchase: New Application Accepted

November 2019

With the admission of a new procedure for the authorization of economic concentration, presented by América Movil and Telefonica de El Salvador, begins "the technical, economic and legal analysis that will determine whether or not the transaction will cause a significant limitation of competition."

Both companies submitted this third application for authorization on 19 September this year.

Telefonica's Purchase: Is the Third Time the Winner?

October 2019

After rejecting the two previously filed applications, El Salvador's Superintendence of Competition confirmed that it had received a new request for América Móvil to complete the acquisition process of Telefónica.

In mid-September 2019 it was reported that the Superintendence of Competition of El Salvador declared inadmissible, for the second time, the request for authorization of economic concentration presented by América Móvil, arguing that the information in the file was not complete.

Guatemala: Fixed Lines Growing Faster Than Cell Phone Lines

January 2017

Between December 2015 and June 2016 the number of fixed telephone lines grew by 40%, while the number of mobile lines grew by only 3% in the same period.

Figures from the Superintendency of Telecommunications in Guatemala show that the number of fixed telephones lines went from 1,710,000 in December 2015 to 2,400,000 in June last year, while the total number of mobile lines increased from 18.1 million to 18.6 million.

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