The Argentinian government has approved Telefónica’s proposed sale to Telecom Argentina.

However, the approval is based on Telecom divesting parts of its radio spectrum and certain customers as part of the deal, as the country’s regulator pushes to prevent anti-competition.

Telecom struck an agreement to snap up Telefónica’s Argentine unit for $1.25 billion last year.

Under the imposed conditions, Telecom must divest strategic assets to ensure that other operators maintain their competitive capacity in the market.

The deal will see Argentina’s telecoms market shrink from three to two, with AMX (Claro) and Telecom the two remaining carriers. The divesting of the spectrum will lead to a third player, according to Argentina’s regulator.

“In order to preserve the market structure of three strong competitors, Telecom must transfer a base of six million active mobile customers to an independent acquirer: four million in the Buenos Aires Metropolitan Area and two million in the rest of the country. The transfer includes contracts, numbering, and call history, and will not generate any cost for users,” said the Autoridad Nacional de la Competencia (ANC).

The name of an independent telco wasn’t disclosed by ANC, though the regulator did state that the future third entrant will have access to network sharing agreements, allowing it to use Telecom’s infrastructure while developing its own.

This includes the “joint use of antennas and radio equipment (RAN sharing), service provision over another operator’s network (national and international roaming), and equipment hosting in shared sites.” The minimum term for this arrangement is three years.

For Telefónica, the company edges a step closer to exiting another Latin American market, as the Spanish telco readjusts its focus on Europe and Brazil.

The telco has exited several other Latin American markets, including Colombia, Chile, Ecuador, Peru, and Uruguay, while a deal to exit from Mexico has also been agreed.

This piece was automatically translated from DCD’s Spanish site and edited by a member of DCD staff.