UPDATED: The future of Brazil’s telecom market has become complicated by several potential, competing acquisition offers. Nearly everyone expects some kind of market consolidation, but how it will happen is not yet clear. Over the past few weeks, French company Vivendi has fielded dueling bids from Spain’s Telefónica and Telecom Italia to buy its Brazilian unit, GVT, which offers fixed telephony, broadband and pay-TV services.
This morning, Vivendi announced that it has entered exclusive talks with Telefonica to sell its Brazilian unit GVT. Telefonica raised its offer to €7.45 billion ($9.83 billion) in cash and shares, which tops a €7 billion proposal from Telecom Italia announced late yesterday.
Meanwhile, Telefónica is also rumored to be interested in acquiring NII Holdings’ Nextel operations in Mexico and Brazil. And this week, Oi released a material fact saying that it has engaged Banco BTG Pactual to review alternatives to enable a viable proposal to acquire shares of the operator TIM, which is owned by Telecom Italia.
However, Oi doesn’t have enough cash to complete TIM’s acquisition and would need partners. Anonymous sources told Bloomberg that BTG Pactual will approach Telefónica and América Móvil to join with Oi on the move to acquire TIM with the goal of then breaking the company up.
Telecom Italia acknowledged Oi’s move, and released a statement saying that TIM Brasil remains “a strategic asset on which it is committed to concentrating important investment and growth prospects.” The company also specified that it did not know anything about Oi’s plans.
When Telefónica announced its bid to buy GVT, the company was hoping to combine its operations, though there would be some overlap. However, acquiring GVT’s operations could make even more sense for Telefónica if it also winds up purchasing part of TIM; GVT is well known for its Internet broadband and pay-TV services and that could complement TIM’s wireless business. The other alternative, Nextel in Brazil, is worth more from spectrum perspective since Nextel holds licenses in the 800 MHz and the 1,800 MHz bands.
700 MHz auction: Brazil’s telecommunications regulator Anatel has scheduled the auction for the 700 MHz frequency band to offer LTE services for September 30. The government expects to raise about U.S.$3.43 billion.
More news from Latin America:
- The Mexican pay-TV company Grupo Televisa acquired full control of Cablecom.
- Mexican MVNO Virgin Mobile expects to invest U.S.$45 million in its local operations within the next three to five years.
- The government of Venezuela has restarted a tender to award spectrum in the AWS and 2.5 GHz bands.
- MEF, the global community for mobile content and commerce, has appointed Ricardo Bastos as the new general manager of its Latin America Chapter.
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