The Congressional telecommunications committee in Argentina reportedly has ruled that Telefonica’s minority stake in Telecom Italia violates the nation’s antimonopoly laws. The Operator’s local units are the market leaders of fixed and mobile telephony as well as internet services market in Argentina. The House Communications Commission’s bill asked President to “implement the measures necessary to avoid monopolistic activity which eventually could result from the economic concentration stemming from Telefonica’s acquisition of shares in Telecom”.

In October 2007,Telefonica Spain has acquired 24.7% stake in Telecom Italia and gained two seats on the Italian operator’s board. However, Telecom Italia sustains the Spanish operator’s indirect 10 percent holding equals a mere 1.8 percent stake in the Argentine unit, and that its directors have no decision-making powers in the two markets where the providers overlap – namely Argentina and Brazil. “Although the percentage is very small, in operating terms, it puts them inside the decision making process and this inevitably means that (the companies’) decisions are practically shared,” states Eduardo Mondino, who filed the complaint to the House Committee. The telecommunication sector was privatized in the 1990s and the fixed-line telephony business was divided between Telecom Argentina and Telefonica de Argentina.

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