The Superintendence of Telecommunications, as Sectorial Competition Authority, approved the purchase by Cabletica of 100% of the operations of Telefonica de Costa Rica, which offers telephony and mobile Internet services nationwide.
May 28, 2021. The Superintendence of Telecommunications, as Sectorial Authority of Competition, approved that Cabletica buys 100% of the operations of Telefonica de Costa Rica, which offers telephony and mobile Internet services nationwide. The technical analysis determined that this concentration does not generate negative effects or affect healthy competition.
"SUTEL as regulator of the Telecommunications market is required to watch over the user's interest and guarantee the continuity and quality of service to Movistar's clients, who could become Cabletica's clients at the moment the concentration materializes. The operator will have to maintain the same quality and price conditions agreed in the current contracts", explained Federico Chacon, president of SUTEL's Board.
According to our legislation, the operator that takes over the operations of another operator must meet the same requirements of the operator that transfers its shares. In addition, it assumes the commitment to comply with the same obligations of the concession contracts.
"Cabletica, S.A. must officially inform the Superintendence of Telecommunications, the moment from which the concentration operation herein authorized is effectively carried out", states Resolution RCS-106-2021 of the SUTEL Council.
Article 20 of the General Telecommunications Law 8642 establishes that "once the assignment is authorized, the respective contract must be signed with the new concessionaire".
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.
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).
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.
The Superintendence of Competition of El Salvador once again declared "inadmissible the request for authorization of economic concentration presented by América Móvil, which would consist of the acquisition of the share capital necessary to control Telefónica's operations."
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