Telefonica de Costa Rica's Purchase is Approved

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.

Monday, May 31, 2021

In July 2020, Telefonica announced an agreement with Liberty Latin America for the sale of the entire share capital of its Costa Rican operation, a transaction that amounted to $500 million. Initially it was reported that Liberty Latin America would make the purchase, however, plans changed and the transaction was made through Cabletica, a subsidiary of the business group.

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From SUTEL's press release:

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".

More on this topic

El Salvador: Telefonica's Purchase Conditioned

August 2020

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).

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 Declared Unacceptable Again

September 2019

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."

Once again, the purchase of the telephone company in El Salvador is declared inadmissible, since at the end of May, the authorities informed that they also declared "inadmissible the request for economic concentration presented by América Móvil S.A.B. de C.V., last March 5 of this year."

Costa Rica: Telecom Company Changes Hands

February 2018

Televisora ​​de Costa Rica has sold 80% of the company Cabletica to the US company Liberty Latin America.

From a statement issued by Liberty Latin America:

Liberty Latin America to Acquire Controlling Interest in Cabletica

Acquisition of 80% stake in leading Costa Rican cable operator