Convergencia Research, Análisis y consultoría
Thursday, December 02, 2021

Regional Players Map in Latin America 2021

Operator`s footprint is reconfigured under the motto of more efficient networks

Regional Players Map in Latin America 2021 - Credit: © 2021 Convergencialatina
Regional Players Map in Latin America 2021 - Credit: © 2021 Convergencialatina

The initiatives of mergers and acquisitions in Latin America took different forms along 2021. The traditional purchase and sale operations of the sector were joined with overwhelming force by the joint ventures for the creation of InfraCos (or infrastructure companies, under a neutral network model) and new forms of collaboration in search of an efficient deployment, operation and maintenance of networks.

Telefónica plays a leading part in this new era of alliances, with the sharing agreement with Sion in Argentina; OnNet Fibra in Chile, owned 60% by KKR and 40% by Telefónica Chile; FiBrasil in Brazil, with the help of the Canadian investment fund CDPQ; and Colombia, which will emulate the Chilean case in participation between the Spanish and KKR. This strategy was combined with the complete exit from Central America, after the sale of its subsidiary in El Salvador to General International Telecom Limited for US$ 144 million (under analysis by the local Superintendency of Competition).

Just as Telefónica reduced its exposure in Latin America, Liberty Latin America (LLA) has a greater weight at the regional level, and Millicom, in Central America. LLA stayed with Claro Panama, for US$ 200 million; Movistar Costa Rica, for US$ 500 million; and agreed with América Móvil to create a joint venture in Chile between VTR and Claro. Millicom, meanwhile, was left with 100% control of Tigo Guatemala for US$ 2.2 billion, after buying 45% of its partner in the Joint Venture, Miffin Associates. And it joins the wave of asset divestitures prevailing across the region, particularly those in infrastructure and mobile money operations.

The main step in the divestiture of assets was taken by AT&T: in one of the largest mergers and acquisitions of the year, Grupo Werthein took possession of Vrio in november. In this way, the American company consolidates its exit from Latin America and the global entertainment business, to focus on 5G and fiber. It also sold DirecTV's fixed Internet and spectrum business in Colombia to Movistar, although the endorsement of the Colombian ICT ministry is still pending.

América Móvil is also part of this trend to spin off assets: in order to dispose of its 36,000 towers in 15 Latin American countries, it established Sitios Latinoamérica.

Brazil deserves a separate chapter. While the final endorsement of the purchase of Oi Móvil by Tim, Vivo and Claro is awaited, the consolidation of regional ISPs is reconfiguring the fixed broadband market (these players lead the residential segment, with a share of over 40%). 2021 was a year of consolidation for these companies, which also sought to gain a place in the 5G market by forming consortiums. Indeed, the auction held in November was the gateway to eventual 5G FWA services for Brisanet, Unifique, Copel, Sercomtel and Cloud2u.

 

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