Telecom: Regional Market Transformed

The mergers and acquisitions being reported in Central America are largely because not all companies in the region are willing to make the heavy investments that the transition to 5G technology will require.

Tuesday, February 26, 2019

The most recent register of the sale of assets of one of the Central American competitors is the case of Telefónica, which on January 24 reported that for $648 million it sold to América Móvil all the shares of Telefónica Guatemala and 99.3% of Telefónica El Salvador.

A month later, on February 20, the Spanish company reported that it reached an agreement with Millicom S.A. for the sale of all the shares of Telefónica Costa Rica, Nicaragua and Panama, closing the transaction at $1.65 million.

See "Telefónica Starts Selling Assets in the Region" and "Telefonica Sells Its Assets to Millicom".

Gilles Maury, leader of Technology, Media and Telecommunications (TMT) of the firm Deloitte, told that "... this consolidation of the market is based on moves that Millicom had made before, which began with the acquisition of the operator Cable Onda in Panama - the strongest in that country. Now they have been consolidated with the operations of Telefónica, which leads the mobile telephony market in Panama".
You may be interested in "Central America: Cell Phones Market Up to March 2018.

Maury added that "... operating companies are also preparing the technological evolution in two concepts: convergence between fixed and mobile networks and the preparation of 5G technology - fifth generation of mobile telephony technologies. The internet network of things is being prepared, which will be an extension of a multiplication of mobile internet extensions. This will imply having fixed and mobile networks, as well as greater investment capacity in these sectors.

Also see "Optical fiber Cables: Figures up to June 2018"

For experts on the subject, the transformation of the market will be fast, derived from this operators will have to make timely decisions, and the example was the exit of Telefónica de Centroamérica, a company that aims to focus on the markets of South America and Europe.

For Maury "... small players could be acquired because they will not have the financial strength or the capacity of these investments in 5G networks and converging networks, with the definition of the regional market."

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