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.
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).
When the Central American economies begin to relax the restrictions that have been adopted to prevent the spread of covid-19, sales of pay television service are forecast to fall by at least 2%.
Using a demand/income sensitivity model developed by CentralAmericaData's Commercial Intelligence Area, it is possible to project the variations that household demand for different goods and services will undergo as the most critical phases of the spread of covid-19 are overcome and the measures restricting mobility in the region's countries are lifted.
At the auction held in El Salvador for the 1.7 and 2.1 GHz bands, Tigo was awarded five blocks and Claro was awarded four more.
For the auction held on December 5, the 1.7 and 2.1 GHz bands of the radio spectrum were made available, which is structured in 12 blocks, however, only nine blocks were awarded.
Elmundo.sv reports that "... Siget did not inform how much the revenues from the awarding of these blocks amounted to and indicated that it does not yet have a date for the signing of contracts for the assignment of this segment of the spectrum."
In El Salvador, businessmen are preparing a proposal for the government to disconnect the 2G telephone network, so that services migrate to 4G and 5G technology.
The initiative, which is being prepared by the National Association of Private Enterprise (ANEP), will be presented to the authorities during the National Meeting of Private Enterprise (Enade) 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.
During the first three months of 2019, Central American countries imported cell phones for $329 million, 27% more than what was reported in the same period of 2018.
Figures from the Trade Intelligence Unit of CentralAmericaData: [GRAPHIC caption="Click to interact with the graphic"]
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.
The sanction was imposed following a complaint made "by TVC Network, S.A. de C.V., against Digicel, S.A. de C.V., for a possible abusive dominant position."
The complainant stated that this economic agent was creating barriers to the entry of competitors or the expansion of existing ones in the market for the termination of national and international calls, informed the authorities of the country.
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."
In El Salvador, the Superintendence of Competition reported that "it has declared inadmissible the request for economic concentration presented by América Móvil S.A.B. de C.V., on March 5 of this year."
"When a new application for authorization is submitted, the SC will continue this process on the basis of a technical, legal and economic analysis, under the principle of independence that the LC mandates and distinguishes its actions, with the sole objective of protecting and ensuring competition in the country," reported the Superintendence of Competition (SC).
Although Samsung and Apple mobile phones represent more than half of the devices used in the region's markets, there is an upward trend in the preference for devices from the Chinese brand Huawei.
An analysis of the Trade Intelligence Area at CentralAmericaData provides interesting data on the use and preference of cell phone brands in the region.
The request for authorization of economic concentration was presented, "consisting of the acquisition by América Móvil of control of the majority of Telefónica's capital stock in El Salvador."
At the end of January of this year it was reported that América Móvil bought 99.3% of Telefónica El Salvador, a transaction that reached close to $311 million.
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.
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.
The company reported that it signed an agreement with Millicom S.A. for the sale of all shares of Telefonica Costa Rica, Nicaragua and Panama, closing the transaction at $1.65 billion.
After the company reported in late January 2019 that for $648 million it had agreed to sell to America Móvil all the shares of Telefonica Guatemala and 99.3% of Telefonica El Salvador, it now announced that it had completed the sale process of the entire operation in Central America.
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