Target Information

On September 18, 2025, a significant milestone was reached in the telecommunications sector of Ecuador when the Superintendence of Economic Competition (SCE) approved the acquisition of Otecel S.A., the parent company of Movistar and Tuenti, by Millicom Spain S.L., a subsidiary of the multinational group Millicom (Tigo). With a transaction valued at $380 million, this acquisition marks Tigo's official entry into the Ecuadorian market, expanding its presence in Latin America, where it already operates in countries such as Colombia, Paraguay, Bolivia, Panama, and Costa Rica.

The SCE's approval was granted after confirming that the transaction does not disrupt the structure of the relevant markets, namely Advanced Mobile Services (SMA), Internet Access Services (SAI), and Carrier Services (SP). As a result, this acquisition poses no risks of market concentration that could harm competition or consumer interests.

Industry Overview in Ecuador

Ecuador's telecommunications industry is currently characterized by a competitive landscape with several key players vying for market share. The entry of Millicom, under the Tigo brand, is expected to invigorate the sector by providing increased investment in infrastructure and technological advancements. The Ecuadorian telecommunications market has been experiencing steady growth, driven by a growing demand for mobile and internet services, largely fueled by urbanization and increased smartphone penetration.

Currently, the main competitors include Claro and CNT, both of which offer a range of services to meet the needs of Ecuadorian consumers. In recent years, the Government of Ecuador has implemented policies to encourage competition and enhance service quality, which has resulted in an increase in choices available to consumers.

Movistar and Tuenti, prior to their acquisition, had established a considerable user base in the country. However, the evolving landscape requires providers to adapt continuously to emerging consumer expectations and technology advancements. The new competition brought in by Tigo is likely to drive better pricing and quality of services for users.

As Millicom takes over these brands, the anticipated changes could include improved network infrastructure, greater digital service offerings, and innovative customer engagement strategies that are already successful in other markets. The future development of the industry will depend on how effectively Tigo can implement these improvements and respond to competitive pressures.

Rationale Behind the Deal

The acquisition of Movistar and Tuenti is a strategic move by Millicom to enhance its footprint in the lucrative South American telecommunications market. Given the growing demand for mobile connectivity and internet access in Ecuador, Tigo aims to leverage its existing capabilities to improve service offerings and expand its customer base. Moreover, by investing in network infrastructure, Tigo plans to address the needs of the increasingly tech-savvy population who are reliant on digital services.

This investment not only aims to consolidate Tigo's presence in the region but also to stimulate more competition, which is beneficial for consumers. By maintaining existing contracts and service plans, Tigo ensures a smooth transition while preparing for future innovation and service improvements under the Tigo brand.

Investor Information

Millicom, the parent company of Tigo, is a leading telecommunications and media company dedicated to emerging markets in Latin America and Africa. With a strong commitment to digital transformation, Millicom has established itself as an innovator in providing telecommunications services, focusing on mobile and broadband connectivity. Over the years, the company has proven successful in launching and managing telecom operations in various countries, highlighting its strategic approach to market entry and growth.

As Millicom expands into Ecuador through this acquisition, the company seeks to not only increase its revenue and customer base but also enhance the technological landscape of the country. With their expertise and resources, Millicom is well-positioned to implement effective strategies that address consumer needs while simultaneously advancing the telecommunications sector in Ecuador.

View of Dealert

The authorization of Millicom's acquisition of Movistar and Tuenti is viewed favorably in the context of investment prospects for the Ecuadorian telecommunications industry. Given that Tigo's entry into the market aligns with existing growth trends in digital services, it is anticipated that this move will result in a positive impact on consumer experiences and service quality in the near future. The infusion of capital for infrastructure improvements and innovative services presents a potential for enhanced connectivity and customer satisfaction.

Moreover, Tigo’s strategic investment reflects an understanding of market dynamics, suggesting that better pricing strategies and customer service could emerge as they engage directly with existing competitors like Claro and CNT. This competitive pressure is likely to yield more favorable conditions for consumers, making it a beneficial development for the overall telecom landscape in Ecuador.

However, potential risks exist, such as the successful negotiation of the enabling title with the Ecuadorian government, which is critical for the finalization of the operation. Should these negotiations proceed positively, Tigo's growth trajectory within Ecuador could further strengthen its position in the region.

In conclusion, the deal represents a pivotal moment for both Tigo and the Ecuadorian telecommunications industry. If executed effectively, this acquisition could unlock significant opportunities for growth and enhance connectivity for over 17 million users in Ecuador, making it a promising investment in the telecommunications sector.

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