Telecom Italia aims to invest US$2.8bn in Argentina to develop broadband

- Thursday, May 12, 2011

Telecom Italia aims to invest US$2.8bn in Argentina to develop broadband

European telecoms operator Telecom Italia (NYSE: TI) will take on a three-year, 2bn-euro (US$2.8bn) investment plan in Argentina to develop fixed and mobile broadband, regional media reported the company's executive president, Franco Bernabe, as saying.

In Argentina, Telecom Italia recently took corporate control of Telecom Argentina (NYSE: TEO), a deal that was subject to a court battle for alleged monopolistic practices.

As Spanish telecoms company Telefónica (NYSE: TEF) holds shares in Telecom Italia and operates in Argentina through its subsidiary, Telefónica Argentina, there was concern that the deal with Telecom Argentina would threaten competitive practices.

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During a press conference, Bernabe said that Telefónica would have no influence on TI's operations in Argentina and that the two companies would remain strong competitors.

FOCUS ON EXISTING OPERATIONS

In general, Bernabe said, TI is looking to strengthen its efforts in Latin America where it has a presence - in Argentina and Brazil - through local operators. According to Bernabe, the two countries are the most important in Latin America, as they both have resources that can be used to drive economic development.

In Brazil, where Telecom Italia controls local mobile carrier TIM Participações, the executive said the company will focus investments on developing TIM's fiber optic network.

According to Bernabe, the European operator does not plan to enter other markets in Latin America, but rather will concentrate on Argentina and Brazil, as the countries require structural investments.