Chile’s telecom regulator has greenlit the merger between Claro (the Chilean subsidiary of Mexico’s telecom giant America Movil) with regional rival Liberty Latin America amid growing concerns that the joint venture could monopolize the national telecom sector, optical fiber services in particular.
America Movil and Liberty have vast network operations throughout the region, with both of them already enjoying monopolies in some markets.
Following the approval, America Movil’s subsidiary Claro and Liberty’s VTR will form a joint venture under a brand called “ClaroVTR” to roll out 5G and optical fiber services to every corner in the country.
FNE aprueba joint venture entre VTR y Claro sujeto a devolución de espectro radioeléctrico, obligaciones de uso eficiente de espectro y enajenación del negocio de televisión satelital. https://t.co/lAlcBSim9r pic.twitter.com/UJ1BDIrH4Q
— FNE_Chile (@ChileFne) October 5, 2022
They might build a strong broadband infrastructure, but the lack of competition could tempt them to increase prices for Internet services, analysts warned.
To comply with Chile’s antitrust law, the operators have agreed to give up a portion of wireless frequencies that they purchased in an auction recently. The local regulator also instructed Claro to divest its satellite television services to a third party.
In Chile, VTR and Claro are the leading services providers of optic fiber and pay-TV services, respectively. The merger agreement came in September 2021, a few weeks after Liberty acquired Claro’s operations in Panama.
“This is an important moment that will transform the telecommunications industry in Chile, as we are now cleared to accelerate the country’s digital and connectivity goals for Chileans,” Balan Nair, CEO of Liberty Latin America, stated in a blogpost.