Telecom Italia’s Brazilian mobile unit TIM Participações SA has bought telecommunications infrastructure operator AES Atimus Group from Companhia Brasiliana de Energia for R$ 1.6 billion (US$1.025 billion), in cash. The acquisition represents a significant expansion of TIM’s infrastructure, since it’s adding a fiber-optic network of 5,500 kilometers in 21 cities, including the Rio de Janeiro and São Paulo metropolitan areas.
TIM President Luca Luciani believes that payback may happen within three years, due to synergy gains, which are projected at approximately R$ 250 million (US$ 160 million) in 2012 and R$ 1 billion (US$ 641 million) in three years. “Atimus’ value will be at least three times higher than what we’ve paid,” he said, during a press conference Friday morning in São Paulo. Luciane used its Intelig acquisition as an example. “We paid R$ 900 million (US$ 576 million) and now it worth R$ 3 billion (US$ 1.923 billion).”
TIM Brazil will also benefit from synergies through the internalization of AES’s access infrastructure, avoiding the need to rent connections from third-party operators.
Adding AES Atimus to the current fiber-optical network allows TIM to complement its portfolio, offering mobile broadband high-speed, and being able to support LTE technology. Luciane also pointed that, with AES Atimus, TIM should do a cable spinoff to offer fixed broadband in residential and corporate market, reaching 100 Megabytes per second and 1 Gigabytes per second, respectively.
TIM believes that adding capacity, quality and high-speed will enable it to increase its market share. Brazil counted a total of 215,015 mobile lines last May. TIM is the third-largest provider, with 25.34% market share, behind Vivo (29.48%) and Claro (25.46%).
AES Atimus’ network is concentrated in São Paulo and Rio de Janeiro urban areas, which represents 27% of national GDP. The fiber network passes around 550,000 companies and 8 million residential areas. “This region is a telecommunications potential market of R$ 30 billion (US$ 19.23 billion). Today we have just R$ 3 billion (US$ 1.923 billion), and we don’t have fixed offers,” said Luciane.
The amount of R$ 1.6 billion for AES Atimus’s acquisition is not included in the five years TIM Brazil investments plans of R$ 14 billion (US$ 8.974 billion) to be used from 2009 to 2013. According to Luciane, from 2011 to 2013 carrier will invest R$ 8,5 billions (US$ 5.4 billion).
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