TdP Looks Set To Benefit From Movistar Deal

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According to a note to the Lima stock exchange Peru's two largest telecoms operators are to merge, in a move that will create far and away the largest operator in an increasingly dynamic market. Fixed-line incumbent Telefónica del Perú (TdP), 98.18% owned by Spain's Telefónica, will merge with Telefónica Móviles del Perú Holdings (TMPH), operating as Movistar, which owns 97.77% of mobile market leader Movistar. This will create the largest operator in the country, with around 97% of the fixed-line market and 57% of the country's mobile connections. The decision to merge is partly financial as Telefónica's debt to EBITDA ratio will decrease to 1.5 times in comparison to its present level of 2.4.