The Costa Rican telecommunications regulator, Sutel, has officially rejected a proposed merger between two of the country’s leading private operators, Liberty and Tigo.
The decision halts a deal that was first announced in August 2024, when parent companies Liberty Latin America (LLA) and Millicom International Cellular revealed plans to combine their Costa Rican operations into a single entity.
The proposed merger would have resulted in a dominant market player, with Liberty Latin America expected to hold approximately 86% ownership, while Millicom would retain about 14%. The companies claimed that the merger aimed to foster a stronger, more integrated service provider for consumers in Costa Rica. However, concerns over market competition appear to have played a significant role in Sutel’s rejection, with the involvement of the country’s competition authority, Coprocom, suggesting antitrust issues may be at the heart of the decision.
Industry observers indicate that the primary worry is that such a concentration of market power could lead to higher prices and reduced service quality or options for consumers, especially given that Kölbi, a state-owned telecom operator, would remain the only significant competitor post-merger. While Sutel has not publicly detailed its reasons, the move aligns with efforts to prevent market monopolisation and protect consumer interests.
Liberty Costa Rica has signalled that it engaged extensively with regulators over several months to develop solutions that would address competition concerns. After being informed of Sutel’s initial rejection in September, Liberty and Tigo filed a formal appeal in late October, challenging the regulator’s decision. Both companies are now awaiting the final outcome of their appeal, leaving the future of the proposed merger uncertain.
