Planning Minister Julio de Vido announced Wednesday that the government has canceled an auction for the 25 percent of Argentina's 3G spectrum still controlled by the government, and will now go into business itself through ARSAT, the state-owned satellite company.
ARSAT is already building three new satellites to provide the service, and with the government's help, small companies and cooperatives should now find it much easier to become internet providers in parts of the country where consumers now have little or no choice when accessing the web or using cell phones.
Argentina's $14 billion mobile phone market is now controlled by America Movil's Claro, Telecom Italia's Personal and Telefonica's Movistar.
De Vido said there were five bidders, but Claro, which is owned by Mexican billionaire Carlos Slim, was the only company with the necessary resources to manage part of the spectrum, and letting Claro win "would have led to more concentration."
The government also is studying other ways of reducing monopoly control in the telecommunications business, de Vido said, citing the dominant positions of Telefonica and Telecom as a setback for consumers.
"This is not a state takeover," de Vido insisted, but an effort to bring consumer prices down through more competition.
De Vido said the move also should give consumers more choices as 4G devices roll out.