Telecom Italia's decision to sell its Argentine unit to U.S. investment fund Fintech has sent shockwaves through the South American nation's telecommunications sector and could lead to a shake-up of the local cable TV industry.

If the deal goes through, the investment fund owned by Mexican businessman David Martinez would take control of one of Argentina's two biggest telecom companies, whose businesses include fixed and mobile telephony, Internet and data transmission.

The main competitor of Telecom Argentina, in which local group Los W has a minority stake, is the local subsidiary of Spanish telecoms giant Telefonica, particularly in the mobile telephony and Internet segments.

Both companies were being closely watched a month ago by Argentine authorities after the Spanish group agreed to raise its stake in Telecom Italia.

But if the Italians choose to exit the Argentine market by selling their 22.7 percent stake in Telecom Argentina, that would remove all suspicion about Telefonica de Argentina's alleged interference with its main competitor.

Telecom Italia CEO Marco Patuano said Friday the unsolicited $1 billion offer was accepted because of the "need to rebalance" the heavily indebted group's asset structure.

Fintech owns 40 percent of Cablevision, Argentina's largest cable operator, but may have to sell that stake due to local restrictions barring a telecommunications company from owning media assets.

Martin Sabbatella, head of Argentina's Federal Audiovisual Communication Services Authority, said Friday after meeting with Martinez that the executive told him "if he must sell his cable stake, he will do so." EFE