El Salvador’s competition regulator Superintendencia de Competencia has provisionally approved America Movil’s request to acquire Telefonica’s operations in El Salvador on acceptance of a series of anti-trust conditions. In a statement, the watchdog cautioned that Claro El Salvador’s increased market share could give rise to "limits on competition" and the operator must therefore rule out the future use of spectrum currently used by Telefonica’s Movistar unit in the country.
The portions include 25 MHz with national coverage in the 850 MHz band and a further 30 MHz in the 1900 MHz band, with Claro required to hand the frequencies back to telecom regulator SIGET for the ultimate benefit of a smaller operator or a new market entrant. If a new operator does arise, Claro will be obliged to provide national roaming services for a period of at least 3 years, added the competition watchdog.
Claro will also be allowed to improve its pricing plans for customers but must maintain "all of the marketing strategies developed by Movistar and by Claro" for a total of 7 years, added the regulator in its statement. If all of these conditions are met, the operator will finally be permitted to execute the purchase, it said.
America Movil subsequently confirmed in a filing with Mexico's main stock exchange that it had been notified of the watchdog’s decision and would analyse the conditions before commenting further.
Telefonica reached an agreement to sell its Guatemala and El Salvador assets to America Movil for a total of EUR 570 million back in January 2019. The parties agreed that Telefonica El Salvador had an enterprise value of EUR 277 million and had initially expected the deal to close last year.
