Competing telecom giants, América Móvil and Entel, have independently decided to pursue the acquisition of Telefonica’s assets in Chile rather than proceed with their previously planned joint bid. The news followed their official statements to Chile’s Financial Market Commission (CMF), which confirmed the termination of their agreement announced earlier in October. While there was once potential for a combined bid, both companies are now separately exploring the opportunity.
Entel’s CEO, Antonio Büchi, addressed the situation in a statement to the CMF. He revealed that the due diligence process is still ongoing, making it premature to disclose specific offer details. Similarly, América Móvil stressed their intention to individually evaluate their involvement in acquiring Telefonica’s business in Chile.
This development sets the stage for an intriguing competition, as both operators aim to seize this strategic opportunity. Notably, rival Chilean telco WOM has already placed an offer, potentially benefiting from the absence of combined forces from América Móvil and Entel.
Historically, joint ventures among major telecom players have provided substantial competitive advantages. The partnership could have offered significant financial resources, making a formidable bid. However, splitting into separate entities introduces competitive tension and an opportunity for individual differentiation, possibly driving up Telefonica’s selling price.
WOM is reportedly optimistic about its position. The company’s limited fixed-line operations might reduce regulatory scrutiny compared to larger rivals. Insiders suggest this could work in WOM’s favor, particularly with its significant mobile business footprint. As Telefonica aims to offload assets promptly and profitably, engaging several interested parties may indeed amplify the sale price.
The competition doesn’t just benefit Telefonica’s financial ambitions but also introduces dynamic market shifts in Chile’s telecom sector. As the dust settles, it remains to be seen which offers will prevail and how new ownership structures might reshape the telecom landscape in the region.
