Argentina’s government, headed by President Javier Milei, issued a communication on March 21 informing that it had “decided to enact a precautionary order suspending the effects of the acquisition of Telefónica by Telecom.” The agreement for the acquisition of Telefónica’s subsidiary in Argentina, which operates under the Movistar brand in the Argentine market, by Telecom Argentina, which provides telecommunications services within the country under the Flow and Personal brands, was signed on February 24.

Telecom responded to the government’s move by issuing a press release noting that the company “has not been given formal notice of the resolution.” “The company reiterates its commitment to abidance by current regulations and procedures and awaits the government’s decision resulting from the assessment of the impact of the transaction. Telecom ratifies its willingness to cooperate with the agencies in charge of the analysis with a view to ensuring transparency in pursuance of international standards and free competition principles.”

The government has explained that the precautionary order follows a recommendation from the Argentine Commission for the Defense of Competition, since “the merger would significantly increase the resulting company’s market share.” “The transaction would lead to a 61% market concentration in the mobile phone sector, while the concentration could reach 69% in fixed phone services and up to 80% in home Internet services in some areas of the country.” The Executive Branch asserted that “it has been resolved that transparency and free market practices be safeguarded and that the suspension remain in place until further analysis of the transaction has been conducted.”