SAO PAULO, Brazil-A little more than one year after auctioning B-band cellular licenses and less than a year after the Telebras privatization, the Brazilian government already is dealing with agreements and acquisitions that will change the country’s wireless market profile.
The movement started early this year when unconfirmed press reports emerged revealing a possible merger between Telemig Celular and Telenorte Celular. Telemig spokesman Homero Dolabella called the disclosure nothing but “speculation” and said Telemig does not have, at least for the moment, any intention of joining up with another operator.
However, potential changes in telecom operators’ ownership and control began to worry telecom regulator Anatel when negotiations involving many of the other operators ensued.
Brazil’s national development bank BNDES announced it is leaving the consortium operating Tele Norte Leste Celular, selling its 25-percent share to the La Fonte Group. As a minority shareholder in the group, control of the company remains in the hands of Andrade Gutierrez, Inepar, Macal and Banco do Brasil.
In addition, Construtora Queiroz Galvao has sold its 29-percent stake in Algar Telecom Leste to fellow stakeholder Lightel.
Operational-control changes also reached UGB, a consortium controlled by Globopar (60 percent) and Bradesco (40 percent), which operates A-band operator Tele Celular Sul in the States of Parana and Santa Catarina as well as B-band operator Tele Norte Celular in the states of Paraiba, Rio Grande do Norte, Ceara, Pernambuco, Piaui and Alagoas. The consortium has sold 50-percent of its assets to Telecom Italia.
With an eye on these negotiations and basing its decision on the original law not allowing any changes in operator ownership control before five years, Anatel published a resolution to “verify the control and transfer of control in companies that render telecommunication services.”
The new resolution does nothing but match market reality, allowing the operators to accomplish changes in stock control but within the law. According to the new resolution adopted by Anatel, the controllers of a telecommunications company can sell their shareholdings, but the sum holdings of the original group must not fall below 50 percent plus one vote.
More ownership shake-ups may be in the works.
Possible changes involving Telefonica’s participation in the control of fixed/wireless operator CRT, a telcom company in Rio Grande do Sul; and of Tele Sudeste Celular, the A-band operator in Rio de Janeiro and Sao Paulo, are more complicated. Some analysts say Telefonica should give up one of the two areas because both are considered “noble” concessions, containing areas with high populations and thus the most potential customers; Brazil’s telecom law says one group cannot control more than one noble area. However, Telefonica so far has not seemed willing to divest one of the operations, which as a result has already caused Grupo RBS, one of its partners in CRT, to make its own departure.
Grupo RBS plans to sell its CRT share (5.4 percent) to Telefonica. With the exit of RBS, Telefonica will have 50.5 percent of the operator, sharing the ownership with Portugal Telecom (19.59 percent), Banco Bilbao Vizcaya (5.96 percent), Iberdrola (5.96 percent), Companhia Telefonica de Chile (2.22 percent) and Telefonica de Argentina (0.95 percent). The group still maintains control of the operator, with 85.1 percent of the shares.
Telefonica has said it will spin off the wireless operations of CRT, but that it would maintain the 85.1-percent consortium control in the resulting company. Telefonica has had to take this action because the telecom law also prohibits any one group from controlling two fixed-line operators, and Telefonica also owns the Telesp wireline company in the state of Sao Paulo.
