BUENOS AIRES – Is TCI Intl. poised to become Argentina’s biggest cable operator? That’s the speculation in Latin America’s top pay TV market, following a report in the country’s leading financial daily that the cabler had bought out rival operator VCC for $200 million.

Both companies denied the front-page report in Ambito Financiero’s Thursday editions, but both admitted to Daily Variety that talks between the companies were taking place.

“These talks are no more serious than with any other operator,” TCI Intl.’s director of communications Catherine May said. “But we are very bullish on Argentina, and we are looking for new opportunities.”

A TCI Intl. buyout of 650,000-subscriber VCC is not far-fetched, though the price – as gauged by recent industry deals – would likely be at least $300 million for a majority stake.

TCI Intl. already owns 51% of 550,000-subscriber MSO CableVision, and is now thinking of upping this stake to 80%. The U.S. cabler is elsewhere partnered with US West, which – through its subsidiary Continental Cablevision – owns 50% of VCC. (Co-owner Samuel Liberman retains control of VCC.)

Argentina’s cable market has witnessed rapid consolidation in the last few years, with three operators now controlling nearly half of the country’s 5 million subscriber base. Many sources believe the market will eventually be dominated by two alliances that will compete in the converging arenas of telephony and pay TV.

Fueling the notion that a megamerger is in the offing, Constancio Vigil, majority owner of top broadcaster Telefe, earlier in the week told Daily Variety that his company was in talks with TCI Intl., VCC and Telecom (one half of the country’s telco duopoly) about setting up a pay TV megacompany. Telefe earlier this year sold its cable systems but remains an active pay TV programmer.

Such a partnership would go up against the Clarin Group, Argentina’s largest media conglom, and Spanish-controlled Telefonica de Argentina, the country’s other telco giant. The two are already allied in Clarin’s million-subscriber MSO Multicanal, in which Telefonica has a 25% stake. Multicanal has engaged in a cable-system buying spree this year, prompting much talk of a possible TCI/VCC pact.

(Andrew Paxman in Mexico City contributed to this report.)

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