Argy-bargy? Telefonica at loggerheads with govt over Clarin treatment

30 Nov 2016

Argentina’s government has urged Spanish-owned Telefonica Group to hold direct talks with media conglomerate Grupo Clarin in an effort to resolve a simmering dispute over the perceived preferential treatment that the latter has received from the administration of President Mauricio Macri. According to Bloomberg, which cites people familiar with the situation, the government has urged the rivals to work out differences over market rules, and prevent the authorities from being dragged deeper into the row. The crux of the dispute centres on rules that prevent Argentina’s mobile operators from entering the lucrative pay-TV sector until January 2018, and thus blocks them from competing with Clarin’s Cablevision unit.

Since seizing power in November 2015 the president’s ‘pro-business’ government has enabled Grupo Clarin to acquire stricken mobile operator Nextel Argentina, as a way of transforming Cablevision into a fully-fledged multi-play operator. Following the closure of the deal – which had been blocked by the previous administration – Nextel went on to acquire five wireless broadband operators for a total of USD138.2 million, gaining a significant amount of spectrum in the 900MHz and 2.5GHz bands in the process. The spate of deals has drawn public accusations of government favouritism from Telefonica.

Earlier this month the Madrid-based giant sent two top executives to Argentina to meet with government officials, and reportedly came away concerned about policies under consideration, including the prospect of Clarin being awarded a 4G mobile licence for a cut-price fee – said to be just 10% of the USD209.14 million licence fee that Telefonica paid in December 2014. The European carrier has told the government that if it is not satisfied by future developments it will seek arbitration at the World Bank’s International Centre for Settlement of Investment Disputes.