The Superintendencia de Telecomunicaciones (Sutel), Costa Rica’s telecommunications regulator, has rejected the proposed merger between Liberty and Tigo, two of the country’s leading private telecommunications operators. The decision marks a significant setback for both companies, which had sought to consolidate their operations to strengthen their competitive position in the national market, CRHOY reported.
Background of the Proposed Transaction
The merger was first announced on 1 August 2023, when Liberty Latin America Ltd. (LLA) and Millicom International Cellular S.A., the parent company of Tigo, revealed plans to combine their respective operations in Costa Rica. Under the terms of the agreement, Liberty and its local minority partner would hold an estimated 86% stake, while Millicom would retain 14% of the new entity, with the final ownership structure subject to adjustments upon closing.
The transaction aimed to create a stronger operator capable of expanding digital infrastructure, improving service quality, and accelerating the rollout of new technologies such as 5G.
Sutel’s Rejection and Industry Reactions
On 11 September, Sutel informed the parties of its initial decision not to authorize the merger, citing concerns that have not yet been publicly detailed. Liberty confirmed the rejection and subsequently filed an appeal on 22 October, jointly with Millicom.
In a statement to local media outlet CR Hoy, Liberty Costa Rica expressed disappointment with the decision but emphasized its respect for the legal process:
“We regret this initial resolution and, together with our counterpart in the transaction, have filed an appeal. We remain confident that the decision can be reversed and reaffirm our commitment to Costa Rica’s digital development through next-generation infrastructure and innovative services.”
Liberty added that it continues to move forward with its 5G standalone (SA) network deployment and remains “a solid and leading telecommunications company” in the country.
Corporate Responses
Liberty Latin America’s CEO Balan Nair described Sutel’s decision as “surprising,” telling BNamericas that both companies had worked closely with regulators “for several months to design appropriate remedies addressing any competition concerns.”
Millicom’s Executive Director Marcelo Benítez also voiced disagreement with the regulator’s decision, telling investing.com:
“Respectfully, we do not agree with this decision.”
Next Steps
Both companies are now awaiting Sutel’s response to their appeal. The Comisión para Promover la Competencia (Coprocom), Costa Rica’s competition authority, has also been consulted on the matter but has yet to issue a statement.
If the rejection is upheld, the outcome could change the competitive landscape of Costa Rica’s telecommunications market, which is currently dominated by Liberty, Tigo, and the state-owned operator ICE (Instituto Costarricense de Electricidad).