The president elect or Argentina, Alberto Fernandez, left Mexican telecom mogul Carlos Slim with the same impression he made on many other personalities he met on his Mexican tour: superficiality. That's how the richest man in the country described him to some of his closest executives. At last Monday's meeting (which Slim attended at the Vatican's request), Fernandez issued his general impressions on the Argentine economy, the region, and the disastrous inheritance he will receive. Slim, on the other hand, was transparent in what he expects from the new Peronist administration for his telecom subsidiary in Argentina, Claro. This is probably why on Tuesday Fernandez declared that the Argentine telecommunications market was far too concentrated.
The ClarĂn Group, Argentina's leading actor in content and telecom, bought a telephone company called Nextel years ago whose spectrum was later converted to the mobile telephony segment. Then came the merger with Telecom, whose owner is the Mexican businessman David Martinez.
As a result of these two movements, ClarĂn exceeds the established spectrum limits and is forced to sell part of it. Slim wants the sale to happen within a clear schedule. In Argentina, spectrum quotas for cellular services are limited. If ClarĂn does not sell, Claro, which is Slim's company, has nowhere to grow.
Thus, the president-elect finds himself in the crossfire of the telecom giants. Fernandez has a strong relationship with ClarĂn's CEO HĂ©ctor Magnetto and in parallel could find in Slim a useful counterweight to ClarĂn's hegemony.
Despite the turbulence of the Argentine economy, Claro remains a profitable business for Sim. It has about 25 million users in the country and earned almost US$500 million last year.
To add some drama to the story, Slim and David Martinez have a close relationship with Former President and VP elect Cristina Kirchner, with whom Fernandez is expected to have a complicated relationship. Kirchner leads the radical left-wing of the Fernandez administration.
Slim has two additional interests on the spectrum. On the one hand, the possibility of offering satellite television, which in Argentina is a monopoly of Direct TV (AT&T), and on the other, the bids for 5G, where he hopes there will be no favoritism for ClarĂn.
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