The contentious and controversial tender for a pair of much-wanted personal communications services licenses in Argentina became even more rowdy last week when two companies with strong ties to the country’s current telecom providers entered the fray.
The new bidders for the dual 1800 MHz PCS licenses are Argentine cable company Supercanal Holding and a company that represents Citicorp Equity Investment, a private equity branch of the U.S. company Citibank.
Of particular concern is that Citicorp Equity Investment owns 30 percent of Telefonica de Argentina, which is one of the two telephone operators monopolizing the Argentine market.
Telephone operators are prohibited from offering PCS services until 18 months after the new entrant is chosen and begins service.
Citicorp and its Telefonica de Argentina co-owner Telefonica International of Spain, last week announced they have jointly bought 66 percent of Argentina’s third largest cable company, Cablevision TCI, reportedly for $500 million.
Some have expressed fear about Citicorp’s bid as a result of its partial ownership of Telefonica de Argentina, which raises monopoly concerns. But analysts said Citicorp is a large company with holdings in several international ventures and as such may be legitimately pursuing the license for itself, not for Telefonica de Argentina.
Additionally, Telefonica de Argentina is involved in a scandal concerning the tender after bugged conversations between a lawyer representing the company and the president of former bidder AT&T Argentina indicated the appearance of collusion between the two. Discussed in the conversation, which aired on Argentine news programs, was the determination to delay the tender until next year. Argentine Communications Secretary German Kammerath was referred to in the conversation as well.
While the tender was delayed at AT&T’s request, several other bidding companies requested the delay as well, including Telia of Sweden, Samsung Electronics Co. Ltd. and AirTouch Communications Inc. Also, the tender has faced several delays since it first was proposed in 1995. It was delayed three times in September alone.
Rumors were circulating that AT&T may be interested in buying an Argentine telecom operator. The company dropped out of the bidding process last month after it was unable to resolve differences with the other members of the consortium it led and created to bid on the license.
AT&T currently is placing most of its focus on the expected Nov. 17 auction in Mexico, analysts said.
The Argentine license is considered lucrative because it will be the first digital network in the country to cover a 100-kilometer region including Buenos Aries and the surrounding areas as far north as Zarate and south to La Plata.
