Telecom Argentina: TMA Remedies Hit Business, Credit Holds
Conditional approval removes rejection risk, but the remedy package reduces synergy upside and leaves Telecom bonds as a carry hold, not a new Buy.
We take a fresh look at Telecom Argentina (B2/B-/B-) following the June 18 antitrust ruling on its acquisition of Telefónica Móviles Argentina (TMA), and assign a Neutral recommendation to the issuer. Within the curve, we prefer the TECOAR 8.500% 2036 notes for investors who want to maintain exposure. The conditional approval cuts both ways. It removes the risk of outright rejection and gives Telecom a clearer path to integration, but the conditions are heavier than the market expected and reduce the scale benefits the acquisition was meant to deliver.
For bondholders, the question is no longer whether the deal can proceed, but how much value Telecom retains after divesting 6 million mobile customers, transferring spectrum, selling fixed internet subscribers in selected localities and giving a new competitor access to its network. On that question, we land at Neutral. The EBITDA tied to the required divestitures appears manageable relative to the group, leverage remains low, and the rating is still constrained more by the sovereign than by the business perimeter. That helps explain why the credit did not reprice the news as a material negative, even as the equity sold off about 12% from the eve of the ruling and roughly 20% from its early June high.
What the ruling does add is another layer of execution risk around EBITDA retention, integration timing, competitive pressure from a regulator enabled competitor and management’s capital allocation priorities. At current spreads, we do not think the bonds pay investors enough to add to that risk. Our Neutral call is therefore driven mainly by valuation. Telecom OAS compressed by roughly 50 bps in the weeks before the ruling and is now close to one year tights, so the curve compensates investors for holding the credit, but no longer for adding to it. We would not add the 2031s or 2033s at current levels. For investors who need exposure, we prefer the 2036s, but as a Hold rather than a Buy.
What happened
On June 18, 2026, Argentina’s antitrust tribunal, TDC, within the ANC, cleared Telecom’s acquisition of exclusive control of TMA, owner of the Movistar brand, subject to structural and behavioral remedies. Telecom acquired 100% of TMA for US$1.245bn, with the transaction finalized on February 24, 2025, but the deal had been under preventive suspension since March 2025. The regulator’s concern was concentration. Combined, Telecom, through Personal, with a 33.8% share, and Movistar, with a 24.4% share, would have held roughly 58% of the mobile market, compared with AMX, through Claro, at 42%. This would have created a duopoly in mobile and close to 70% concentration across total telecom services. The remedies are intended to bring the combined position back toward 50%.
The principal disclosed terms and reported implementation details include:
• Mobile divestiture of at least 6 million customers, including 4 million in AMBA and 2 million in the rest of the country, to an independent buyer. This represents roughly a third of TMA’s 19.2 million mobile accesses and about 9% of the national mobile market.
• Transfer of the radio spectrum usage rights needed for the divested mobile service to operate competitively. Press reports also indicate a broader spectrum remedy of 130 MHz, including 60 MHz returned immediately nationwide and the remainder routed to the secondary market.
• Network access for the new entrant, including RAN sharing, national and international roaming, and colocation, for a transition period reported at two to three years, until the new operator builds out its own network.
• Transfer of Movistar’s residential fixed internet base in 28 localities, totaling 211,400 subscribers, across CABA, Buenos Aires, Mendoza, Neuquén and Río Negro, plus behavioral remedies in the corporate and wholesale segments.
• A divestiture window of up to 18 months, supervised by an independent monitoring agent.
Telecom called the ruling excessive and said it is weighing its options as a listed company with financial implications, without ruling out any alternative. The company also reiterated its investment commitment, at roughly US$1.3bn this year and about US$9bn since 2018. The ruling resolves the binary risk but leaves Telecom with a choice: comply, negotiate, challenge the decision or seek modifications. Its initial response points away from quiet acceptance.
For bondholders, that creates a two way path. A legal or regulatory dispute would delay integration, while full compliance would lock in the loss of scale and EBITDA. Either way, the deal is no longer at risk of outright rejection, which is the part that mattered most for the credit.
