Claro, TIM and Vivo formalize proposal to buy Oi Móvel | Telecommunications

The companies Of course, TIM and Live disclosed a relevant fact this Saturday (18th) and formalized a binding offer for purchase of Oi’s mobile operation. The proposal includes all frequency assets, customer base, mobile network elements, systems and platforms, in addition to the right to use space in properties occupied by the company.

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No figures have been released, but Oi wants at least R $ 15 billion for the UPI of Mobile Assets. The operator expects to hold an auction of the assets by the end of 2020, with the conclusion of the deal in 2021. If the sale is completed, the company should end the judicial reorganization process that extends since 2016.

No details were given on how the customer base division would look. Oi Móvel represents about 16.3% of the mobile telephony market, with 36.6 million customers, 66.3% of which in the prepaid service. The most relevant states are Ceará, Pernambuco and Paraíba, where Oi is the leader in mobile lines.

Of course, TIM and Vivo already wanted to buy Oi Mobile

TIM and Vivo say that, if the deal is successful, Oi’s integration will add value for shareholders, for its customers and for the sector as a whole, and will promote gains in the experience of use and improvement in the quality of the service provided.

The perspective for Claro is that, in addition to generating value for shareholders and improving the quality of service, the business will contribute “to the development and competitiveness of the Brazilian telecommunications sector”.

It is worth remembering that Algar also wants to compete in Oi Móvel and wants to buy a stake in the company’s fiber business. The acquisition would be joint with the Singapore SIC sovereign wealth fund.

Operators will face Cade and Anatel

When Claro bought Nextel, the Administrative Council for Economic Defense (Cade) said that reducing the number of large operators from four to three would be worrying. At the time, the agency noted that any arrangement “would result in clear concern about increasing the possibility of coordinated action between them”. In other words, it would be easier to create a cartel between TIM, Claro and Vivo.

In addition, Anatel also needs to approve the transaction, and all operators would encounter the maximum spectrum limit: the agency lays down that a provider has a maximum of 71.4 MHz of spectrum on frequencies below 1 GHz and 172.5 MHz on frequencies between 1 GHz to 3 GHz, and may extend a maximum of 5% through competitive constraints. In the purchase of Nextel, Claro needed to return a spectrum band that exceeded the imposed quantity.

The situation is calmer in frequencies below 1 GHz: Oi has only 5 MHz in all states except in the Midwest region. But in the bands between 1 GHz and 3 GHz, Oi has between 80 MHz to 95 MHz, depending on the location. Claro, for example, has more than 110 MHz in any Brazilian region; TIM has between 85 MHz and 110 MHz, while Vivo accumulates between 85 MHz to 120 MHz.

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