The Telecom-Cablevisión merger in Argentina generates a company valued at US$ 13 billion that excels in Latin America. It has intangible values due to the power of Grupo Clarín and a elaborate network of business relations: political-institutional and impact on local public opinion.
The power of the new player enables it to project the implications of its regional expansion, at least in the Southern Cone, where it already expanded its presence. In Paraguay, Núcleo, a company controlled by Telecom, acquired 70% of the DTH operator TuVes. The purchase opens up the possibility of future acquisitions in other countries throughout the region, considering the affinity with TuVes after four years of working together with Telecom in Paraguay. TuVes, of Chilean origin, developed a wholesale DTH model with partners such as Viva, of the Dominican Republic, Cable Onda, of Panama, Inter of Venezuela, Tv Cable and Etapa of Ecuador, Inter Satelital and Cotas of Bolivia, and TCC of Uruguay.
The foray of the merged company in Uruguay is through seven subsidiaries of Cablevisión that operate in pay TV, with 23% of the market in Montevideo, although regulatory limitations in that country make the merged company have very little possibility of expanding its services, beyond entering OTT services.
Telecom-Cablevisión has also fueled the fire on all the rumors circulating since last year regarding Telefónica in the region, particularly in Argentina. The Spanish company denies and insists that its strategy to reduce its bulky debt that is around € 50 billion is to sell non-strategic assets. That explained for example the sale of Telefé. But after the suspension of the sale of O2 in United Kingdom –in the context of the Brexit crisis-, getting rid of the Latin American businesses is not seen as an option at Alvarez-Pallete´s team.
That would include any option by DirecTV, the AT&T subsidiary that gives ambiguous signals: the strategic nature of the merger between AT&T and Time Warner repositions the company in the search for new content and services and opens the look toward Latin America. But at the same time, there are growing difficulties in approving the merger, particularly in Brazil, where it was rejected by the regulator Anatel and challenged by the Administrative Council for Economic Defense (Cade, for its Portuguese acronym). Nevertheless, the situation in Brazil has reactivated versions about AT&T's intention to sell DirecTV's business in Latin America.