When everything seemed on track for the consolidation of the Brazilian mobile telecommunications market, an unforeseen event has just arisen that remotely threatens the three-way sale of the operator Oi. For now, Telefónica, Claro and TIM will have to be pending of the Administrative Council of Economic Defense (Cade), regulator that initially has admitted to process an administrative procedure against said operation. The complaint, filed by the telecommunications company Algar Telecom, has reached its initial objective of questioning an asset transfer valued at 3,195 million euros and decided in a public auction on December 14.
Among other arguments, Algar points out that the sale of Oi to the three main market operators aggravates the concentration of the sector, by benefiting the companies that account for 81 percent of the Brazilian mobile telephony market. Specifically, Telefónica -through its Vivo brand- holds 32% of the business, compared to 25% for Claro and 23% for TIM.
The paradox arises that Algar Telecom – the fifth largest telecommunications operator in Brazil – showed interest in Oi at the time, through a joint offer with Archy, but without reaching the initial 15,000 million Brazilian reais and far from the 2.6 billion euros contributed by the winners of the auction.
Algar Telecom is also emerging as a relevant player in the distribution of spectrum, clients and Oi networks between Telefónica, Claro and TIM, since it could be favored by possible remedies or divestments, to which the three reinforced companies will presumably be obliged. As Algar Telecom has indicated to the local media, “the process will be longer than what those involved expect.”
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Among other treasures, the aforementioned shortlist of companies will distribute 4,000 Oi sites, as well as 92 MHz in different bands (900 MHz, 1700 MHz, 1800 MHz, 1900 MHz, 2100 MHz and 2.5 GHz). The 37.6 clients of Oi will also be distributed in the same consortium, of which 24.3 million correspond to contract subscribers.
The Algbar Telecom complaint is not the first critical voice against the Oi deal as Attorney General Samantha Dobrowolski herself also ordered federal and state prosecutors across the country to initiate procedures to help investigate alleged irregularities in the Oi offer. winning consortium.
On the occasion of the recent agreement to sell the Telxius mobile towers to American Tower, Telefónica listed among its most immediate priorities the formalization of the purchase of Oi in Brazil, together with the closing of the Telefónica O2 alliance with Virgin Media (Liberty Global ) in the UK and debt reduction.
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