Narayan AmmachchiSpanish telecom giant Telefónica announced plans to sell its Colombian operations, Telefónica Colombia (Coltel), to Millicom for US$400 million.
Just a year ago, Telefonica sold its Costa Rican assets to Liberty as part of its broader strategy to streamline operations in Latin America.
Millicom, which operates in Colombia under the TigoUne brand, aims to merge Coltel with its existing services to create a more formidable competitor to the market leader Claro, a subsidiary of Mexican telecom giant América Móvil.
Once merged, Coltel-TigoUne would boast over 32 million mobile customers and around 2 million fixed broadband users, potentially generating annual revenues of approximately US$3 billion.
Claro has over 40 million mobile customers and 3.4 million fixed broadband customers, generating around US$3.75 billion annually.
Millicom will be acquiring Telefónica’s 67.5% stake in Coltel, as well as the Colombian government’s 32.5% share. Additionally, Millicom plans to buy the remaining 50% of TigoUne from government-run Empresas Públicas de Medellín (EPM). The total cost of these transactions is expected to reach around US$1 billion.
Millicom may face regulatory challenges, as the deal could result in a duopoly with only two major mobile network operators in the country.
The announcement comes at a critical juncture for Millicom. It recently rejected a US$4.1 billion takeover bid from Xavier Niel’s investment vehicle, Atlas Investissement, citing that the offer undervalued the company.
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