25 Jan 2019
Spanish telecoms giant Telefonica has confirmed that it has sold its businesses in Guatemala and El Salvador to regional rival America Movil (AM) for a total of USD648 million. The units in question – Telefonica Moviles Guatemala and Telefonica Moviles El Salvador – are currently controlled by Telefonica Centroamerica Inversiones, a company which is owned by Telefonica (60%) and Corporacion Multi Inversiones (40%). Both parties are selling their stakes, meaning that AM is acquiring 100% of the Guatemalan business and 99.3% of the Salvadoran cellco. The purchase price paid for Telefonica Guatemala was USD333 million, while the agreed purchase price for Telefonica El Salvador is USD315 million.
The closing of the sale of Telefonica Guatemala took place yesterday (24 January), while the closing of the sale of Telefonica El Salvador is subject to certain customary closing conditions, including regulatory approval. A tie-up between Claro and Movistar – historically two of the largest operators in Central America – could yet cause concern for the competition watchdog in El Salvador. According to TeleGeography’s GlobalComms Database, AM-backed Claro lead the market at 30 September with a 30.6% market share, ahead of Movistar (28.2%), Tigo (27.3%), Digicel (13.3%) and Intelfon (0.5%).
In Guatemala, Claro and Movistar trail market leader Tigo, which is backed by Millicom International Cellular (MIC). Tigo claimed a 53.7% market share as of 3Q18 – more than its rivals combined.