America Movil (AM) has announced the termination of its agreement with Telefonica to purchase 99.3% of Telefonica Moviles El Salvador (Movistar). In a statement, Mexican group AM said the decision to abandon the deal followed ‘careful consideration by both parties of the conditions to obtaining regulatory approval established by the Superintendencia de Competencia (SC) in its recent ruling on the proposed transaction’.
According to TeleGeography’s GlobalComms Database, AM agreed to acquire Telefonica Moviles El Salvador for USD315 million in January 2019, but the transaction encountered numerous regulatory hurdles. Eventually, the SC said last month that it would only permit the deal if AM’s local wireless unit Claro agreed to a package of conditions, after determining that the acquisition would limit competition in the markets for mobile, fixed telephony and business connectivity services. In order to secure approval, Claro would have been required to hand back 25MHz of 850MHz and 30MHz of 1900MHz spectrum currently held by Movistar, as well as retain all of the marketing strategies developed by Movistar and by Claro for seven years, and should a new entrant arise in that time frame, then Claro would have been required to provide national roaming services for at least three years.