Page 150 - SAMENA Trends - September 2019

REGULATORY & POLICY UPDATES SAMENA TRENDS

The Superintendency of Telecommunications (Sutel) derived from the acquisition of 100% of the capital
has announced that it has approved the EUR503 million stock of Telefonica CR by Millicom.’ When concluded,
(USD552 million) takeover of Telefonica de Costa Rica the deal will represent the final piece of Millicom’s
(Movistar) by Millicom International Cellular (MIC). As Central American jigsaw, after the recent takeovers of
Costa Rica per Sutel documentation, the acquisition will be carried Telefonica assets in Nicaragua and Panama. A triple
out via Millicom’s local ISP unit, Millicom Cable Costa
takeover deal was inked in February this year, with
Rica (which trades as Tigo). The regulator’s Resolution Millicom agreeing to pay a combined enterprise value
RCS-221-2019 assessed: ‘There is no evidence of of USD1.65 billion for the three cellular businesses.
the existence of potential anti-competitive effects (September 3, 2019) telegeography.com

El Salvador’s Superintendence of Competition and USD315 million, respectively. The closing of the
(Superintendencia de Competencia, SC) has announced Telefonica Moviles Guatemala sale took place that
that it has rejected the proposed takeover of Telefonica same month, but the Salvadoran deal was rejected
Moviles El Salvador (Movistar) by America Movil (AM) as inadmissible in May. In light of the latest setback,
El Salvador for a second time. The SC says that the ‘resolution of it remains to be seen whether AM – which controls
mobile market leader Claro El Salvador – will continue
inadmissibility’ was agreed on 26 August and relayed to
the two parties on 28 August; the competition watchdog to pursue the merger. This is not the first time that a
notes that AM had failed to supply it with certain deal tabled by AM has fallen foul of the authorities;
background information relating to the transaction. On back in September 2012 the regulators blocked the
2 September AM and Telefonica both waived their right group’s attempt to merge Claro with smaller rival
to file an appeal against the decision, but the SC notes Digicel after Claro refused to divest surplus spectrum.
that this does not prevent AM from submitting a new Claro led the mobile market as of 30 June with a 32.9%
application, once the necessary information has been market share, ahead of Tigo (26.0%), Movistar (22.5%),
satisfactorily completed. In January 2019 Spanish Digicel (18.2%) and Intelfon (0.4%).
telecoms giant Telefonica agreed to sell its businesses (September 12, 2019) telegeography.com
in Guatemala and El Salvador to AM for USD333 million

Orange France has filed a priority question of Arcep executive board are now assigned different
constitutionality (QPC) with the Council of State tasks in order to ensure that the principle of separating
(Conseil d’Etat) challenging the power of sanction of investigative and sanctioning powers is met. A
the telecoms regulator Arcep, the company confirmed body comprising four board members (including the
France to AFP. The incumbent operator has been put on notice chairman of Arcep) – Reglement des Differends de
Poursuite et d’Instruction (RDPI) – adopts decisions on
several times by Arcep between October 2018 and
January 2019 for failing to meet its universal service formal notices, investigations, dispute settlements and
obligation (USO) for fixed telephony services, quality inquiries, while the remaining three board members
of service (QoS) shortcomings and its commitments make decisions on sanctions. (September 10, 2019) Le Monde
in relation to the deployment of fibre. Orange has
claimed that the principles of separation of powers The French Competition Authority (Autorite de la
and impartiality guaranteed by the Constitution are Concurrence) has approved the sale of Iliad Group’s
not respected within Arcep. The operator added that, telecom towers in France to Spanish infrastructure
altough the regulatory, investigative and sanctioning group Cellnex. Under the deal, Cellnex will acquire Iliad
powers of the regulator are divided into three groups, 7, the subsidiary that manages Iliad’s 5,700 domestic
this division is not sufficient under the Constitution. towers. The deal is valued at EUR2 billion (USD2.2
The Council of State must now examine the request billion). Thomas Reynaud, Iliad’s CEO, previously
before deciding whether to send it to the Constitutional said: ‘This transaction is part of a long term industrial
Council, which would then have to rule on the matter strategy allowing us to accelerate [the] rollout of our
and, if necessary, repeal the legislative provision. If 4G and 5G networks and to increase Iliad’s investment
Orange wins, Arcep could lose its power to sanction leeway … It enables more efficient infrastructure
operators. In July 2013 the Constitutional Council rollouts in the future, while meeting the challenges of
revoked the legal provisions governing Arcep’s powers, further increasing territory coverage.’ Cellnex already
thus stripping the watchdog of its authority to enforce operates 2,000 mobile towers in France, which it
sanctions. Arcep’s authority was subsequently purchased for EUR700 million back in 2016/17 from
restored with Decree No. 2014-867 of 1 August 2014; Bouygues Telecom. Elsewhere, Iliad Group has entered
under the new provisions, different members of the into exclusive talks with French private equity firm

150 SEPTEMBER 2019