Q COSTARICA — The Superintendencia de Telecomunicaciones (SUTEL) – Superintendency of Telecommunications – has prohibited the merger between Liberty and Tigo, arguing that the union of the two companies would negatively impact competition and consumer interests.
The regulatory body made the decision after rejecting the companies’ appeal for reconsideration, which sought to overturn a previous ruling issued in September.
According to SUTEL’s technical and legal analysis, the merger would significantly increase market concentration and grant the companies a dominant position, potentially leading to higher prices, widening the digital divide, and diminishing innovation and service quality.
The ruling also states that the conditions proposed by the companies were insufficient to mitigate the identified risks.
Federico Chacón, president of SUTEL’s Board of Directors, explained that the agency “is acting under a legal mandate to protect healthy competition in the telecommunications market and the public interest. Authorizing the merger could cause irreversible damage to the market structure.”
Liberty Responds
After the decision was announced, Liberty Costa Rica expressed its disagreement and asserted that the transaction would have contributed to strengthening competition and accelerating the expansion of new technologies in the country.
“We are convinced that the transaction would have directly benefited users and the digital ecosystem of Costa Rica,” stated José Pablo Rivera, Communications Director.
The company affirmed that it will remain focused on investment and strengthening connectivity through the expansion of its 5G Standalone network, the growth of its fiber optic infrastructure, and the development of solutions for homes and businesses starting in 2026.
Liberty started out back in November 2011 as Movistar, the local branch of the Spanish telecom giant Telefónica. But in June 2022, after Liberty Latin America bought the company, it rebranded to Liberty.
Before that, in early 2019, the European firm Millicom announced plans to buy Movistar Costa Rica and fold it into its Tigo brand. The SUTEL gave the green light to the deal in August 2019, but by May 2020, Millicom backed out and said it wouldn’t go through with buying Telefónica’s Costa Rican operations.
Then, in July 2020, Liberty Latin America stepped in with a firm deal to take over Movistar, the country’s second-biggest mobile provider. By August 2021, under Liberty’s management, Movistar Costa Rica kicked off a new chapter. They teamed up with Cabletica, Liberty’s cable operator, launching a joint social media campaign called “Together Much Better” to mark their merger.
Fast forward to August 1, 2024, Liberty Latin America and Millicom Tigo announced their plans to merge services in Costa Rica, signaling another big shift in the country’s telecom sector.