Spanish telecoms giant Telefónica has struck a deal to sell its Argentinian unit to Telecom Argentina for $1.245 billion.

It follows reports last month that the carrier was in talks with both international and domestic suitors for the business.

Telecom Argentina is the second-largest mobile carrier in the country, with Telefónica the third biggest for market share.

Following the announcement, Argentina’s President Javier Milei noted the deal would be heavily scrutinized amid fears it could harm competition.

“This acquisition could leave approximately 70 percent of telecommunications services in the hands of a single economic group, which would create a monopoly formed thanks to decades of state benefits received by the company,” Milei’s office said in a statement.

Telecom Argentina is estimated to have more than 21 million customers, while Telefónica serves more than 16 million customers in the market.

Both trail América Móvil which has more than 25 million customers in the country through its Claro brand.

Slimming down

Telefónica operates under the Movistar brand in Argentina.

The carrier has previously divested units in Central America and has been keen to reduce its business in Latin America since 2019.

Millicom International Cellular, another Latin American-focused telco, acquired Telefónica’s Panamanian, Costa Rican, and Nicaraguan mobile units in 2019 for a combined $1.6 billion.

Last year, it was also reported that Millicom was in talks with Telefónica over a potential acquisition of Telefónica’s Colombian unit, while last week it was reported in Spanish media that it has stepped up plans to sell its Mexican unit.

Also last week, Telefónica’s Peruvian unit filed to begin voluntary insolvency proceedings.