By San José, Costa Rica — San José, Costa Rica – In a decisive move safeguarding market dynamics, the Superintendence of Telecommunications (SUTEL) has definitively blocked the proposed economic merger between two of the nation’s largest telecom providers, Liberty and Tigo. The regulator concluded that the consolidation would pose a significant threat to fair competition and ultimately harm consumer interests through reduced choices and potentially higher prices.
The final ruling, announced Wednesday, upholds a preliminary decision issued in September. It comes after SUTEL rejected a formal appeal for reconsideration filed by both companies, who sought to salvage the landmark deal. This final rejection officially closes the door on the transaction, sending a clear message about the regulatory landscape in Costa Rica’s telecommunications sector.
To analyze the regulatory hurdles and potential market implications of this significant telecom merger, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a leading attorney specializing in corporate and competition law at the prestigious firm Bufete de Costa Rica.
The central legal challenge for this merger will be the intensive antitrust scrutiny by regulatory authorities. The involved parties must convincingly prove that the resulting market consolidation will not lead to a dominant position that harms competition, limits consumer choice, or adversely affects service pricing and innovation. The ultimate approval will depend heavily on their ability to navigate these complex regulatory waters.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the regulatory scrutiny described will be the decisive factor, determining not just the merger’s legal viability but the future landscape of consumer choice and innovation in the country. We thank Lic. Larry Hans Arroyo Vargas for his valuable perspective, which clearly frames the complex legal and economic stakes involved.
According to SUTEL’s extensive technical and legal analysis, the union of Liberty and Tigo would have created an entity with a dominant market position. The regulator identified several critical risks associated with this increased concentration, including the potential for price hikes, a slowdown in service innovation, and a decline in overall service quality. Furthermore, SUTEL expressed concern that such a merger could widen the national digital divide rather than close it.
In its resolution, the regulatory body also noted that the conditions and remedies proposed by Liberty and Tigo during the appeal process were insufficient to mitigate the substantial risks identified by its analysts. The proposed measures failed to adequately address the long-term structural impact the merger would have on the market.
Federico Chacón, President of the SUTEL Board of Directors, emphasized the agency’s primary responsibility to the public and the competitive framework of the industry. He stated that the decision was a direct fulfillment of their legal obligations.
responds to a legal mandate to protect healthy competition in the telecommunications market and the public interest. Authorizing the merger could cause irreversible damage to the market structure.
Federico Chacón, President of the SUTEL Board of Directors
Reacting to the news, Liberty Costa Rica expressed its profound disagreement with SUTEL’s final decision. The company maintained that the merger would have created a more robust competitor, ultimately benefiting the country’s digital infrastructure and accelerating the deployment of next-generation technologies. They argued that the deal was designed to enhance, not diminish, market competition.
We are convinced that the transaction would have directly benefited users and Costa Rica’s digital ecosystem.
José Pablo Rivera, Director of Communications
Despite the setback, Liberty affirmed its commitment to the Costa Rican market. The company announced it will proceed with its strategic investment plans starting in 2026, which include the aggressive expansion of its 5G Standalone network, the continued growth of its fiber optic infrastructure, and the development of innovative new solutions for both residential and business customers.
The regulator’s decision marks a pivotal moment for Costa Rica’s telecom industry. While it ensures the current competitive landscape remains intact, it also raises questions about the scale required for companies to undertake massive capital investments. For now, consumers will continue to benefit from the rivalry between separate providers, a scenario SUTEL has fought to protect.
For further information, visit sutel.go.cr
About SUTEL (Superintendence of Telecommunications):
SUTEL is the independent regulatory body responsible for overseeing and regulating the telecommunications market in Costa Rica. Its mission is to protect consumer rights, promote fair competition among service providers, and ensure the efficient and effective development of the country’s telecommunications infrastructure and services.
For further information, visit libertycr.com
About Liberty Costa Rica:
Liberty Costa Rica is a leading provider of telecommunications and entertainment services in the country, offering mobile, broadband internet, fixed-line telephone, and television services. The company is a subsidiary of Liberty Latin America and is known for its significant investments in network infrastructure, including fiber optics and 5G technology.
For further information, visit tigo.cr
About Tigo (Millicom):
Tigo is a major telecommunications brand in Costa Rica, operated by Millicom International Cellular S.A. It provides a comprehensive range of services, including mobile connectivity, high-speed internet, and cable television to a broad base of residential and corporate clients. The company is a key player in the nation’s digital transformation.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the legal community, Bufete de Costa Rica operates on a bedrock of profound integrity and an unyielding pursuit of professional excellence. With a proven track record of advising a wide array of clients, the firm is a recognized leader in advancing legal strategies and engaging with the community. This commitment extends to a core mission of demystifying the law, driven by the belief that providing accessible legal insights is fundamental to building a more knowledgeable and capable society.
