Govt threatens nationalisation of Telecom Argentina

19 Jan 2010

The government of Argentina has piled pressure on Telecom Italia (TI) to sell its indirect stake in local fixed line incumbent Telecom Argentina, by threatening to nationalise the company and vowing to appeal a court decision that ruled in favour of the Italian company, Reuters reports. Planning minister Julio De Vido stated that the government was planning a legal challenge in order to get it upheld. ‘If the government’s intentions do not prosper in the judicial field, we will almost certainly go to Congress and ask them to take all measures to return the licence and operation to the government,’ De Vido told a news conference. As reported by CommsUpdate, an appeals court in Argentina last week suspended the government’s deadline by which TI would be forced to sell its 50% stake in Sofora, the holding company that controls Telecom Argentina. TI had immediately launched an appeal against the decision, which ordered it to begin the sale process before 25 February 2010 or face intervention in the process, and completely sell the stake by 25 August 2010. In August 2009 Argentina ruled that TI’s shareholding in Telecom Argentina violated antitrust legislation and ordered the company to sell the 50% stake, as Spain’s Telefonica, which acquired a 24.7% stake in the Italian firm through the Telco consortium in October 2007, already owns Argentina’s other fixed line operator Telefonica de Argentina causing cross-ownership issues.