Costa Rica’s telecommunications regulator, SUTEL, issued its final decision on November 13 2025 to reject the merger between Millicom International Cellular S.A. (TIGO) and Liberty Latin America. The ruling followed an earlier September 11 decision that had already denied the combination, a denial that the two companies appealed on October 22. The November ruling confirmed that the appeal could not overcome SUTEL’s concerns about the merger’s impact on competition.
SUTEL’s decision was driven by the potential for a dominant market position that could not be adequately mitigated by the remedies proposed by the parties. The regulator cited the risk that the combined entity would have a dominant share in both mobile and fixed broadband services, with Liberty holding 40.1 % of the mobile market and 25.4 % of fixed internet, while TIGO was the third‑largest fixed broadband operator at 15.4 %. The merger would have left the state‑owned carrier, Kölbi, as the only significant competitor, raising fears of price hikes and reduced service quality. Coprocom, Costa Rica’s competition commission, also weighed in, underscoring the potential for a “dominant market force.”
The proposed all‑stock transaction would have given Liberty a 86 % ownership stake and Millicom a 14 % stake in the combined entity. While the deal was valued at an undisclosed amount, the structure was intended to create a platform for accelerated deployment of next‑generation networks, including fiber‑to‑the‑home, and to leverage synergies in network infrastructure and digital services. Millicom and Liberty had argued that the merger would enhance investment capacity and improve customer offerings, but SUTEL concluded that the competitive risks outweighed those benefits.
Both companies expressed disagreement with the ruling. Liberty Latin America’s CEO, Balan Nair, said the outcome was unexpected and that the parties had worked closely with the regulator to design remedies. Millicom’s CEO, Marcelo Benítez, stated that the company respectfully disagreed with the decision and remained confident that the transaction would deliver benefits to customers and support Costa Rica’s digital development. The companies are now exploring alternative pathways to achieve similar strategic objectives, but the SUTEL ruling represents a significant setback for the proposed deal and may influence future regulatory negotiations in other Latin American markets.
The rejection underscores a broader trend of increased regulatory scrutiny of telecom consolidations in the region. Costa Rica’s market, described as mature yet still consolidating, has seen a growing number of cross‑border deals. SUTEL’s decision signals that regulators will continue to prioritize competition preservation, especially when a merger could create a dominant player with limited competition. The outcome may prompt Millicom and Liberty to reassess their expansion strategies in the region, potentially focusing on organic growth or smaller, less contested acquisitions.
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