BUENOS AIRES, Sept 24 Argentina's antitrust
regulator will study a proposal by Spanish-owned Telefonica
to gain control of Telecom Italia, both of
which operate in the South American country, the government said
Telefonica agreed on Tuesday to a deal worth around 860
million euros ($1.2 billion) to increase its stake in Telco, the
controlling shareholder in Telecom Italia which it currently
co-owns with some Italian investors.
Telefonica controls one of Argentina's leading telephone
operators, Telefonica de Argentina, while Telecom Italia
indirectly controls Telecom Argentina , another
Under a complex series of transactions, Telefonica will only
gain full control of Telco - and therefore Telecom Italia -
following approval by antitrust regulators.
That makes approval from Argentina's antitrust regulator
The government said in a statement it has asked the CNDC
antitrust watchdog agency "to establish whether this shareholder
modification violates the commitments both companies took on
before the state in October 2010."
"Any changes must be pro-competition and be expressly
approved by the Argentine government," it added.
Following a two-year probe, the Argentine government dropped
an antitrust investigation of Telecom Italia and Telefonica in
October 2010 after the government and telecommunication
companies reached an agreement.
At the time, Argentina's antitrust commission said it could
reopen its investigation if the agreement, which sought to limit
Telefonica's influence over Telecom Argentina, was broken.
A source at the CNDC had told Reuters earlier on Tuesday
that they were looking into the situation to "ensure
competitiveness in the Argentine marketplace."