Sources tell Reuters that Oi negotiates the sale of its mobile division to TIM and Vivo: thus, the operator wants to raise more than r $ 10 billion that would be used to strengthen the expansion of broadband service via optical fiber. Rumors also say that Spanish Telefónica, owner of Vivo, hired an investment bank to advise on a possible purchase of Oi.
The news agency says it obtained the information from “five people with knowledge of the matter” and that the sources spoke on condition of anonymity, since the negotiations are confidential. Representatives of Oi and Telefónica declined to comment on the matter, while a spokesman for TIM Itália denied that any negotiations with Oi are in progress. TIM Brasil informed the Tecnoblog that denies any negotiation.
Oi is going through a delicate judicial reorganization process that started with debts of R $ 65 billion. In the disclosure of the financial results for the second quarter, the operator recorded a loss of R $ 1.5 billion. The operator tries to raise R $ 2.5 billion in cash to avoid running out of funds in 2020.
Challenges in incorporating Oi Móvel
Any of the operators operating in Brazil will face difficulties to incorporate Oi Móvel. The first challenge is to have the business approved by regulators. At , Cade (Administrative Council for Economic Defense) reported that the reduction from four to three major players “would result in a clear concern about increasing the possibility of coordinated action between them”, such as the formation of a “cartel”.
Anatel would also have to approve the deal, taking into account the limits for incorporating Oi’s spectrum. For frequencies between 1 GHz and 3 GHz, the limit per provider in a municipality is 172.5 MHz, which can be extended to 181, 12 MHz with authorization from the agency.
See below the spectrum of each operator in each region, followed by the sum of the frequencies. The yellow cells represent regions where the limit can be extended by Anatel; and in red, where the limit is exceeded. In the latter case, the operator would have to return the surplus to the Union.
|Region||TIM spectrum||Vivo Spectrum||Oi Spectrum||TIM + Oi spectrum||Vivo + Oi spectrum|
|SP (Capital)||90 MHz||90 MHz||80 MHz||170 MHz||170 MHz|
|SP (Interior)||90 MHz||95 MHz||90 MHz||180 MHz||185 MHz|
|RJ / ES||80 MHz||90 MHz||95 MHz||175 MHz||185 MHz|
|MG||70 MHz||90 MHz||80 MHz||150 MHz||170 MHz|
|PR / SC||70 MHz||90 MHz||90 MHz||160 MHz||180 MHz|
|LOL||85 MHz||90 MHz||95 MHz||180 MHz||185 MHz|
|Midwest, RO / AC / TO||85 MHz||90 MHz||90 MHz||180 MHz||185 MHz|
|North, MA||80 MHz||95 MHz||80 MHz||160 MHz||175 MHz|
|BA / SE||60 MHz||90 MHz||90 MHz||155 MHz||185 MHz|
|Northeast||60 MHz||120 MHz||80 MHz||140 MHz||200 MHz|
If there is no change in the current spectrum regulation, only TIM could buy Oi and maintain all operating licenses. If Vivo did business, it would have to deal with 37 million additional lines without absorbing the entire spectrum currently used by Oi.
This limitation would not occur with a new or foreign company. According to Reuters, Oi would be talking to AT&T; however, the American operator may not be able to do business, since it has debts above US $ 160 billion.
With information: Reuters.