The content has been shared, if you want to share this content with other users click here.
The announcement that Telecom Argentina and cable TV provider Cablevision have reached a deal to merge operations has raised some concerns about a potential monopoly of the broadband and digital content markets.
The preliminary agreement, announced on Friday, still requires the approval of shareholders and regulatory authorities. Its timing caught some analysts by surprise.
"I thought we might see this at the end of the year, so this took me a little by surprise," Enrique Carrier, telecoms analyst with Carrier y Asociados, told BNamericas.
The seeds of this merger were sown when investment fund Fintech was finally allowed to acquire Telecom Argentina from Telecom Italia in March 2016.
This immediately raised questions about the future of the country's largest cable operator, Cablevisión, controlled by the biggest local media group, Clarín. Fintech's owner, David Martínez, had a minority stake in Cablevisión, and said at the time of the acquisition that he had no intention of merging it with Telecom Argentina.
But things have changed since then. In August last year, Clarín announced it would spin off its cable and telecommunications assets from its news content business to create Cablevisión Holding.
Also last year, regulator Enacom approved plans to allow telecoms companies to be able to start offering TV services in 2018. The opportunity to get a first mover advantage in that market was clearly a strong incentive.
Telecom Argentina and Cablevisión have said they will issue 1.184bn shares as part of the deal, leaving Cablevision shareholders with 55% of the combined entity.
If approved, the deal would allow the two broadband providers to offer fixed line and mobile services as well as pay TV. Cablevisión's sister company, the former operations of Nextel, were acquired by Clarín last year.
Telecom Argentina already has vast superiority in terms of coverage of fixed line telephony over its old rival Telefónica.
"The principal concern will be market concentration of broadband," Carrier said, adding that he doubts the merger will be rejected by the authorities.
"What will be interesting to observe will be if the authorities impose any asymmetric requirements on the company to oblige them to provide access to third parties."
Martin Becerra, a researcher with scientific and technical research council Conicet, warned that the merger could lead to market concentration, both indirectly in terms of the amount of infrastructure and directly in terms of wholesale pricing of broadband to ISPs and ultimately on the end user.
"This could lead to abuses in pricing, particularly in more remote areas, having only one provider. It could affect quality and pricing," he told a local radio station.
"In addition, one of its main stakeholders [Grupo Clarín] is the main creator of content in Argentina. That could lead to a monopoly of content in certain areas, ignoring other local content, and that could affect freedom of expression."