Telecom Argentina and cable TV provider Cablevisión have announced a deal which will see the corporate structures and operations merged in a play for the converged market.
The merger, which is expected to begin in January 2018, will create a quad-play proposition in the Argentinian market. Telecom Argentina is one of the larger players in the mobile and broadband market currently, while Cablevisión operates in the paid TV market, as well as broadband. The newly formed business will also have a footprint in other South American countries such as Paraguay and Uruguay.
“We are proud to create the leading company in convergent solutions that will fulfil the digital life of people and facilitate the digital operations of enterprises and corporations,” said German Vidal, CEO of Telecom Argentina.
“At the same time, this transaction will allow us to develop a business model that will accelerate the market transformation towards quadruple play. The merger of the companies will create a company with international standards in quality of service and access to state-of-the-art technology, geared towards a strategy designed for the market and the needs of local consumers.”
The pair has stated the combination of the two companies will strengthen their investment in modern, mobile technology infrastructure as well as the build out of a high speed fibre optic network. Cablevisión will be merged into Telecom Argentina as the surviving brand, though Cablevisión shareholders will take 55% of the combined company.
Changes to the way in which the Argentinian telco industry is regulated could perhaps be seen as one of the catalysts for this move. Prior to January, companies were banned from simultaneously selling TV, mobile, fixed line and broadband services, though rule was scrapped in an effort to stimulate competition in the country. The new rules take effect from January 2018, with the government expecting a $20 billion boost to infrastructure investment over the next four years as a result.