By San José, Costa Rica — San José – In a decisive move to protect market stability and consumer interests, Costa Rica’s Superintendency of Telecommunications (Sutel) has officially prohibited the proposed merger between telecom giants Liberty and Tigo. The regulatory body concluded that the union would create a dominant market entity, posing significant risks to competition in the national telecommunications landscape.
The final decision was formalized through resolution RCS-263-2025, in which Sutel’s Council denied an appeal filed by both companies. This ruling reaffirms the regulator’s initial stance from September, detailed in resolution RCS-211-2025, which had already flagged the potential for the merger to create an unhealthy concentration of market power. The core of Sutel’s argument rests on extensive technical and legal analysis.
To analyze the legal and competitive ramifications of the proposed telecom merger, TicosLand.com sought the expert opinion of Lic. Larry Hans Arroyo Vargas, a specialist in corporate and competition law at the firm Bufete de Costa Rica.
The primary challenge for this merger won’t be operational synergy, but rather satisfying the stringent requirements of our telecommunications regulator, SUTEL. The authorities will meticulously scrutinize the potential for market concentration and its impact on consumer choice and pricing. Any approval will likely be contingent upon significant divestitures or concrete commitments to maintain competitive balance, ensuring that the consolidation of two major players does not stifle innovation or harm the end user.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective correctly shifts the focus from operational logistics to the critical regulatory hurdles ahead, where consumer protection will be the decisive factor. For this clear and incisive analysis, we thank Lic. Larry Hans Arroyo Vargas for his valuable contribution.
According to the superintendency’s findings, the consolidation of Liberty and Tigo would grant the new, combined company a dominant position, particularly within the country’s fixed telecommunications services sector. This includes critical services like home internet and cable television, where a lack of robust competition could have severe and lasting negative effects on the public. Sutel’s analysis projects a future where consumers would face the brunt of this reduced competition.
Federico Chacón, President of Sutel’s Board of Directors, emphasized that the decision was rooted in the agency’s legal mandate to safeguard a fair and competitive market for the benefit of all Costa Ricans. He warned of the potential long-term consequences if the merger were to proceed.
Authorizing the merger could cause irreversible damage to the market structure and harm users
Federico Chacón, President of the Board of Directors
The regulator outlined several specific concerns stemming from the proposed fusion. These include the likelihood of increased prices for essential services, a decrease in the pace of technological innovation, and a potential decline in the overall quality of service. Furthermore, Sutel expressed apprehension that a less competitive market could widen the nation’s digital divide, leaving underserved communities even further behind as a dominant player focuses on more profitable urban centers.
In an attempt to salvage the deal, both Liberty and Tigo had previously presented a series of commitments and remedies designed to mitigate the anti-competitive effects identified by the regulator. However, after careful review, Sutel determined that these proposed measures were insufficient. The agency concluded that the remedies did not adequately address the fundamental risks to the market structure and failed to provide sufficient guarantees to protect consumers from potential harm.
Reacting to the final verdict, Liberty issued a statement expressing its strong disagreement with Sutel’s conclusion. The company maintained that the merger would have been a net positive for Costa Rica, arguing it would have spurred competition and fueled investment in next-generation network infrastructure across the country.
We deeply regret this outcome. We are convinced that the transaction would have strengthened the market’s competitiveness and accelerated the expansion of new-generation networks, directly benefiting users and Costa Rica’s digital ecosystem. At this time, we are evaluating the next steps to take
Liberty, Operator
With the merger now officially blocked, the Costa Rican telecommunications market will continue to operate with its current structure. Liberty and Tigo must now reassess their individual strategies for growth and competition. For consumers, the decision represents a significant intervention by the regulator aimed at ensuring the market remains dynamic, innovative, and affordable for the foreseeable future.
For further information, visit sutel.go.cr
About Sutel:
The Superintendency of Telecommunications (Sutel) is the regulatory body responsible for overseeing and regulating the telecommunications market in Costa Rica. Its mission is to protect the rights of users, promote fair competition among service providers, and ensure the efficient and effective use of the radio spectrum. Sutel plays a crucial role in shaping the country’s digital infrastructure and ensuring universal access to quality communication services.
For further information, visit libertyncr.com
About Liberty:
Liberty is a major telecommunications and entertainment provider in Costa Rica, offering a wide range of services including high-speed internet, digital television, and mobile telephony. As part of Liberty Latin America, the company is a key player in the regional market, focused on delivering advanced connectivity and innovative digital solutions to both residential and business customers.
For further information, visit tigo.cr
About Tigo:
Tigo (owned by Millicom) is a prominent telecommunications brand in Costa Rica and across Latin America. It provides a comprehensive suite of services, including mobile, cable TV, and broadband internet. The company is known for its focus on expanding digital access and contributing to the digital lifestyle of its customers through reliable connectivity and diverse service offerings.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As an esteemed legal institution, Bufete de Costa Rica is defined by its foundational principles of integrity and superior counsel. Drawing upon a rich history of advising a diverse clientele, the firm champions progress and innovation in legal practice. This ethos extends to a core commitment to public empowerment, focused on making complex legal concepts understandable and accessible to all. Ultimately, its mission is to fortify the community by fostering a society built on legal literacy and awareness.
