Convergencialatina
Futurecom, 28-31 oct  2019, Sao Paulo
Thursday, October 18, 2018

Regional Players Map 2018

Signs of consolidation mark the agenda of great operators in Latin America

Regional Players Map 2018  - Credit: © 2018 Convergencialatina
Regional Players Map 2018 - Credit: © 2018 Convergencialatina

The telecommunications players of the region today live together in a moment marked by buying and selling versions and signs of consolidation, not only within the Latin American market itself, but at the global scale (in the United States, due to the merger of T-Mobile and Sprint; in China, the government evaluates the union of China United Network Communications and China Telecommunications, two of the leading mobile operators, to accelerate the development of 5G mobile services). After the shake caused in 2017 with the announcement of the Telecom and Cablevisión merger -which reconfigured the Argentine market, and also affected the Uruguayan and Paraguayan ones- attention is focused on what could happen with Telefónica and sale rumors of its subsidiaries in Mexico and Central America. 

The operator of Spanish origin needs to alleviate its net financial debt, which as of June 2018 was € 43.593 billion, 30% higher than its market capitalization, and this places the company’s non-strategic assets in sight. Colombia and Argentina are other places that have been shuffled in the last two years as options for Telefónica to sell, since it has José María Álvarez Pallete as its head. 

US operator AT&T has its own dilemma in relation to Directv: in March 2018 it tried to move forward with an initial public offering of Directv Latin America and Sky Mexico and Brazil (finally it was canceled), to pay off debt -taking into account that the latter will increase to about US$ 180 billion once the acquisition of Time Warner is closed. In spite of this, rumors have circulated on the possibility of AT&T taking hold of Telefónica´s assets. 

Another actor that deserves its share of attention in the landscape of upcoming regional movements is Liberty Latin America, which emerged from the division of Liberty Global's regional operations. The operator publicly stated its intention to become a "multi-country company", and chose its subsidiary in Chile, VTR, as the company in charge of managing the purchases of companies throughout the region. The first step was the 80% acquisition of Cabletica in Costa Rica, from Televisora de Costa Rica, for US$ 250 million. Also in Central America, Millicom expanded its footprint in the fixed business with the purchase of 80% in Cable Onda in Panamá. 

Beyond the actors of regional scope, certain countries have their own chapters to be resolved, thus a 2019 is anticipated of new developments and changes. In Brazil, the mobile market could be reduced from five to four main operators, if TIM advances with its intention to acquire Nextel. In Colombia, the State announced the sale of its 32.5% stake in Coltel, the company controlled by Telefónica, and Empresas Públicas de Medellín (EPM), which owns half of Tigo-Une (the rest belongs to Millicom) wants to get out of the telecommunications business.

 

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