UPDATE: Raymond James Downgrades Telecom Argentina to Market Perform on Spectrum Auction Cancelation

Raymond James reduced its rating on Telecom Argentina TEO from Outperform to Market Perform and removes its old $20 price target. Raymond James said, "We are downgrading TEO from Outperform to Market Perform, following the government´s recent decision to cancel the ongoing spectrum auction, and to award the spectrum capacity formerly included in the auction to the government-owned company, AR-Sat. In our view, this measure will likely have a negative impact on TEO´s topline growth potential, as it limits the company´s ability to continue increasing VAS (Value Added Services) usage among its clients. In addition, we believe that the entrance of a new state-owned player in the mobile-phone business could eventually change the competitive landscape, and weaken TEO´s capacity to defend margins in a context of persistent cost pressure." Telecom Argentina closed at $9.85 on Friday.