CNDC: Telefonica stake in TI violates monopoly laws

27 Jul 2009

Argentina’s competition agency, the National Commission for the Defence of Competition (CNDC), has issued a paper stating that Telefonica of Spain’s indirect stake in Telecom’s Italia (TI) violates the country’s antitrust laws, reports local daily La Nacion. The agency is currently considering a case to determine if TI’s 50% stake in Sofora, the holding company that controls incumbent telco Telecom Argentina, threatens competition in the local telecoms sector.

According to TeleGeography’s GlobalComms database, TI is considering selling its stake in Telecom Argentina due to a decision by the CNDC in early April 2009 barring TI from making decisions regarding its Argentine unit and the suspension of the annual shareholders meeting of Telecom Argentina and the directors’ meeting of Sofora. In November 2008 Argentina ruled that Telefonica’s 24.7% stake in TI, bought in October 2007, violates anti-trust laws. When Argentina’s telecoms sector was privatised in the 1990s its fixed line services were divided between Telecom Argentina and Telefonica de Argentina, with a government directive stating that there should be no cross-ownership between the two. TI has also been locked in a lengthy battle with Werthein Group to increase its stake in Sofora. The CNDC has barred TI from exercising its call option on Werthein Group’s Sofora shares, which vested at the end of 2008.