Narayan AmmachchiU.S. telecom giant AT&T is considering an expansion of operations into Argentina, as the South American country begins reforming its telecom sector.
The possible expansion of AT&T was first reported by Reuters, which cited a statement from the country’s Communications Minister Oscar Aguad.
With the telecom market in the United States more or less saturated, AT&T has been looking at foreign countries to keep its growing. Moreover, its subsidiary DirecTV is already providing pay-TV and mobile broadband service in Argentina.
AT&T spent US$48.5 billion to acquire DirecTV last year, and the company is still sitting on US$7.2 billion, which it can use to acquire smaller telecom operators, just as it did in Mexico.
As Argentina reforms its regulations, telecom firms will start offering bundled services to widen their market share. With DirecTV in its tow, AT&T will find it pretty easy to explore the market, say analysts.
Telecom firms in the country have welcomed the government’s plans to reform the market. Already, Telefonica and Telecom Argentina have announced plans to invest money into building telecom infrastructure, with Grupo Clarin, a unit of America Movil, talking of spinning off its subsidiary Cablevision SA.
As a first step towards reforming the market, President Mauricio Macri has signed a decree enabling phone companies to offer paid television.
Telephone companies would need to improve their network cables in order to deliver television, said Reuters, adding that “staying out of the cable market is likely not an option for phone companies wishing to remain competitive.”
Argentina will soon enact a new communications law to encourage technological development and competition in the telecom market. The country hopes its reforms will attract US$20 billion in investment over the next four years.
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