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LatAm Wrap-Up: Brazil tells Telefónica to leave Telecom Italia or find new Vivo partner

Brazil’s antitrust regulator has issued a negative assessment of Telefónica’s recent move to bolster its stake in the Telco holding company that owns about 22% of Telecom Italia, the company that controls Brazilian carrier TIM. By increasing its stake, Telefónica will effectively take control of the heavily indebted Italian firm early next year. On Wednesday, Brazil’s Conselho Administrativo de Defesa Economica (the Administrative Council for Economic Defense, or Cade), said that Telefónica’s successive equity transactions caused “negative competitive effects.”

The message was clear: either Telefónica must sell its position in Telecom Italia or find a new partner for its Brazilian carrier Vivo. According to Cade’s members, Telefónica’s investment in Telco cannot be treated lightly because it has serious effects. The decision was unanimous. Telefónica must choose between ending its financial position in TIM Brasil, directly or indirectly, or it must find a new partner for Vivo with management experience in telecommunications, but with no activity in Brazil.

It’s important to note that in Argentina, Telecom Italia recently decided to sell its controlling 22.7% stake in Telecom Argentina to the Fintech Group for $960 million. The move is part of the company’s plan to raise $5.5 billion to repair its budget and grow its business.

During a meeting with members of the press, TIM President Rodrigo Abreu emphasized that the company has a solid investment plan for Brazil and is focusing efforts to grow its operations.

LTE moving forward: Movistar Colombia, which is owned by Telefónica, and Millicom’s Tigo each announced the launch of their LTE networks. The two companies are the first to offer commercial next-generation telecom services following the country’s recent spectrum auction. According to local reports, Claro plans to launch LTE service in the next few days, while Directv, ETB and Avantel are not expected to launch their services until next year.movistarlte

In Mexico, Nextel announced that it expects to launch LTE by mid-2014. Gustavo Cantú, a director at Nextel, told the local paper El Universal that the service will begin in Monterrey, Guadalajara and the country’s capital with other cities to follow.

As for Brazil, the operators association SindiTelebrasil announced that LTE implementation goals for the FIFA World Cup are on track. Currently, 74 Brazilian municipalities have services, including all 12 cities that will host World Cup games. To meet these goals, operators have installed 8,551 antennas.

Qualcomm: Emerging countries are playing an important role for Qualcomm, which reported $24.8 billion in global revenue for the third quarter, an increase of 30% year-over-year. Rafael Steinhauser, Qualcomm’s Latin America president, pointed out during a press meeting this week that the growth of smartphone adoption and the migration from 2G to 3G and LTE are positive drivers for the company. In Brazil, smartphone tax relief measures have contributed to decreasing prices and increasing sales. The challenge now is to persuade people who bought smartphones to also buy data plans. Steinhauser said that of all smartphone users, one-third have signed up for data plans, another one-third use data plans occasionally, while the remaining one-third only use Wi-Fi connections.

More news from Latin America:

Be sure not to miss what’s happening in Latin America’s wireless markets. Check out RCR Wireless News wrap ups.


Roberta Prescott
Roberta Prescott
Editor, [email protected] Roberta Prescott is responsible for Latin America reporting news and analysis, interviewing key stakeholders. Roberta has worked as an IT and telecommunication journalist since March 2005, when she started as a reporter with InformationWeek Brasil magazine and its website IT Web. In July 2006, Prescott was promoted to be the editor-in-chief, and, beyond the magazine and website, was in charge for all ICT products, such as IT events and CIO awards. In mid-2010, she was promoted to the position of executive editor, with responsibility for all the editorial products and content of IT Mídia. Prescott has worked as a journalist since 1998 and has three journalism prizes. In 2009, she won, along with InformationWeek Brasil team, the press prize 11th Prêmio Imprensa Embratel. In 2008, she won the 7th Unisys Journalism Prize and in 2006 was the editor-in-chief when InformationWeek Brasil won the 20th media award Prêmio Veículos de Comunicação. She graduated in Journalism by the Pontifícia Universidade Católica de Campinas, has done specialization in journalism at the Universidad de Navarra (Spain, 2003) and Master in Journalism at IICS – Universidad de Navarra (Brazil, 2010) and MBA – Executive Education at the Getulio Vargas Foundation.

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