América Móvil is reportedly trying to acquire certain assets of Argentina’s state-run communications firm Arsat, a sign that the Mexican telecom giant is gearing up to bolster operations in the South American country.
The news comes barely days after the country’s Communications Minister Oscar Aguad revealed AT&T’s plans to invest in Argentina. The same statement from Aguad says that Telefonica and Claro are set to invest $2.5 billion as part of their plans to expand in the country.
Reports say Carlos Slim, Mexico’s billionaire owner of América Móvil, met with President Mauricio Macri and discussed purchasing assets of Arsat, which owns radio spectrum worth billions of dollars in addition to a lengthy fiber-optic cable that crisscross the country.
In June last year, América Móvil disclosed a plan to invest US$50 billion in telecom infrastructure across Latin America. Purchasing a stake in Arsat allows Móvil to access the state-run firm’s satellite capacity, something crucial for offering telecom service in remote regions of Argentina.
According to local newspapers, global management consulting firm McKinsey has suggested that Argentina’s new government sell its stake in Arsat to inject competition into the telecom sector.
Argentina’s telecom market is a long way away from becoming saturated. Up to 47% of the country’s citizens don’t have access to broadband internet, according to Aguad.
Móvil, which operates under the brand of Claro in Argentina, reported more than 30% increase in sales in the first quarter of this year. It seems this sudden growth in business volume prompted Móvil to expand operations in the country.
Reports say Slim is also planning to purchase Telecentro to offer pay-television service. Telecom operators are banned from providing pay-TV service in Argentina.