Govt to begin fresh TI antitrust probe

1 Mar 2010

The government of Argentina has decided to start over its antitrust review of Telecom Italia (TI’s) 50% stake in Sofora, the holding company that controls fixed line incumbent Telecom Argentina, rather than pursue a current case that has become entangled in courts, according to Dow Jones Newswires. CommsUpdate reported earlier this month that an Argentine court had revoked a ruling issued by the country’s antitrust agency, the National Commission for the Defense of Competition (CNDC), which ordered TI to sell its indirect shareholding in Telecom Argentina, stating that the CNDC did not have the right to order TI to sell its shares. The government has since decided not to appeal the court’s decision, fearing the process could take years to resolve. Two resolutions have been posted in the government’s official bulletin, one of which revoked an order for TI to sell its stake by 25 August 2010, while the other places Deputy Economy Minister Roberto Feletti in charge of conducting a new investigation into a monopoly in the telecoms sector.

According to TeleGeography’s GlobalComms Database, the CNDC ruled in August 2009 that TI’s indirect stake in Telecom Argentina violated antitrust legislation and ordered the company to sell its 50% shareholding, as Spanish telecom group 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. In January 2010 an appeals court suspended the government’s deadline by which TI would be forced to sell its stake in Sofora. 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. Meanwhile, the European Commission (EC) has said it will study the case after a presentation made by the European Telecommunications Network Operators’ Association (ETNO).