The principal owner of the Colombian capital’s largest telco Empresa de Telecomunicaciones de Bogota (ETB), the city’s district council, will vote in July on a proposal that could give the green light to a plan to sell off a majority stake. Citing Maria Victoria Vargas, the council’s president, Bloomberg reports that the decision to sell is far from guaranteed, and could get vetoed. According to Cristina Plazas, who has been appointed to handle the proposal, the mayor’s office will submit a proposal to allow the city to sell part, or all, of its 86.6% stake. The council will have at least until the end of July to study the project, Plazas said.
According to TeleGeography’s GlobalComms Database, in October 2008 ETB announced it had chosen the investment banking division of Banco Santander to assist in a plan to attract a strategic partner. ETB said the move was designed to give it access to finance for its investment needs and expansion plans. In March 2009 the firm confirmed a 49.9% stake was up for grabs, although this was later lowered to 36.6%. The UK’s BT Group, CANTV of Venezuela, Brasil Telecom (BrT) and local telcos Telefonica Telecom (part of the Telefonica group of companies) and Telmex Colombia expressed an interest and later in 2009 Millicom International Cellular’s name was added to the mix. In July 2010 Colombia’s anti-trust authority – the Superintendency of Industry and Commerce (SIC) – gave the green light to Telefonica bidding for the stake, in an auction that was scheduled for 15 September. SIC claimed that despite the ‘high concentrations of some of the markets related to telecoms services’ the merger would not create a significant restriction to competition. Despite being given the regulatory thumbs up, however, Telefonica declined to bid for the stake, and, worse, ETB revealed that there were no prequalified bidders for the stake at all, sending the company’s shares into a tailspin. In March this year, however, reports began circulating once again that ETB was ready to restart its search for a partner, with speculation that the board was examining a proposal to increase the size of the stake on offer to over 50%, to give the incoming investor a much more desirable controlling stake. This could prove to be a decisive factor for Telefonica, which remains the most likely purchaser.