Telecom’s board informed the National Securities Commission (Comisión Nacional de Valores, CNV) that it had decided to accept the offer from CPS Comunicaciones (Metrotel), in compliance with the conditions imposed on the acquisition of Telefónica Móviles Argentina (TMA). The transaction is valued at US$450 million, plus VAT and any other applicable taxes, payable in installments.

According to the filing, TMA will transfer to Metrotel mobile and residential internet subscribers; rights to use radio spectrum; and rights to use physical infrastructure, including the network core and the assets comprising the FTTH network deployed in Buenos Aires City. The agreement also covers the transfer of contractual rights and obligations under certain agreements required to operate the business, as well as a Master Sharing Agreement.

The deal also provides for certain transitional services to be supplied to Metrotel and a license to use the Tuenti brand in Argentina.

The material disclosure states that Telecom and TMA have been negotiating with Metrotel to establish the final terms and conditions of the asset sale agreement, the sharing agreements required by the TDC, and related contracts. The aim is to meet the divestment requirements imposed by the conditions and enable “Metrotel to operate a converged telecommunications business with sufficient scale and economic significance to meet the main objective established by the resolution of the National Competition Authority (Autoridad Nacional de Competencia, ANC).”

Subscribers to be transferred. TMA will transfer a customer base comprising 6,005,425 mobile subscribers—4,002,013 in the Buenos Aires metropolitan area (AMBA) and 2,003,412 in other regions—and 211,566 residential internet subscribers across the 28 localities specified in the ANC resolution.

“TMA must notify the transferred customers of their transfer to Metrotel as soon as possible. The transfer will include the migration of their contracts, phone numbers, service history, terms and conditions, unused prepaid balances and applicable promotions, so that Metrotel can continue providing telecommunications services to these customers,” the filing states.

Master Sharing Agreement. According to the material disclosure, Telecom, TMA and Metrotel will enter into a Master Sharing Agreement comprising nine separate agreements.

These are: RAN sharing, national roaming, passive infrastructure co-location, fixed connectivity and port leasing on the FTTH network, international roaming, IP transit, building co-location, LAN-to-LAN connectivity, and SMS interoperability.

Related agreements. Telecom’s acceptance of the offer also covers two additional agreements. The first concerns transitional services, under which Telecom and TMA will temporarily provide certain services to Metrotel. The second is a brand licensing agreement.

Under the latter, “TMA will grant Metrotel an exclusive, paid license to use the Tuenti brand in Argentina, solely for the provision of mobile services to B2B and B2C customers and fixed broadband and fixed-line telephone services to B2C customers.”

For use of the brand, Metrotel will pay TMA an annual fee of US$1 million plus VAT, payable monthly in advance in 12 equal, consecutive installments. However, the fee for the first year will be waived.