Brazilian carriers Telefonica Brasil and TIM Participações will consider acquiring assets from struggling rival Oi SA if they are put up for sale, executives from both companies said on Tuesday.
In September, Reuters reported that Oi was in talks with the local subsidiaries of Spain’s Telefonica SA and Telecom Italia SpA to sell assets and avoid insolvency.
“As the CEO of a publicly traded carrier, I have the duty to check whether or not it creates value to my shareholders once frequencies or backhauls (infrastructure networks) are made available,” TIM’s Chief Executive Pietro Labriola told reporters on the sidelines of Futurecom, a major telecoms event in Sao Paulo.
Meanwhile, Telefonica Brasil Chief Executive Officer Christian Gebara said the company would consider acquiring Oi’s mobile operation for its frequencies.
“This decision would depend on which frequencies will be auctioned for 5G and which mobile assets would be put up for sale … We analyze the whole picture,” Gebara said.
TIM is currently Brazil’s third-largest wireless carrier, and buying Oi’s mobile operation would allow it to gain vital market share and expand its coverage to challenge market leader Telefonica Brasil.
TIM shares have risen less than 1% so far this year, underperforming Telefonica Brasil, which has climbed more than 22% in the same period.
Besides the two companies, Mexico’s America Movil, through its local unit Claro, is also open to discussing a deal with Oi, Reuters has reported.
Oi’s Chief Operating Officer Rodrigo Abreu has said the carrier would consider selling its mobile operation if it gets attractive offers.
5G IN BRAZIL
Both Gebara and Labriola emphasized it was too early to speculate on the rules for Brazil’s 5G spectrum auction, as the local regulator, Anatel, is still conducting tests on interference with other services.
A 5G bidding round is now expected to take place in the second half of next year.
“It is problematic if it happens tomorrow with rules that do not benefit the industry or the country … I would be happier if it happens later but with the right rules that guarantee our investment’s return,” Labriola said.
Besides the approval of a new regulatory framework bill for telecommunications approved by the Congress weeks ago, Gebara hopes for additional structural changes to guarantee the success of 5G deployment in Brazil.
“The formula of the past will not be enough,” he said, saying there was a need for a tax reform and other measures to make the “technological leap” to 5G.
Source: Reuters.com