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.
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:
- Brazil’s Oi is selling more than 2,000 towers to SBA Communications for $645 million. Upon closing of the transaction, Oi will enter into a long-term lease with SBA for antenna space on each of these sites.
- The Colombian government signed a memorandum of understanding with Microsoft for the development, adoption and diffusion of information technology and communications in the areas of cyber security, education and innovation.
- Brazilian telecom regulator Anatel decided on a 50% reduction of interconnection rates between wireless networks by 2015. The process will begin with a 25% cut starting in February 2014 and a further reduction in February 2015. The VUM reference rates beginning in February 2016 will be set by modeling costs.
- Brazil’s PC and tablet markets were down in during the third quarter, while smartphones were up, according to IDC.
- The Brazilian state-owned telecommunications infrastructure provider Telebras and TIM will exchange fiber optic infrastructure. The agreement between the two organizations focuses on enabling broadband service delivery in the north and northeast regions as well as improving the network in southeastern Brazil.
- Broadcom announced an integrated gateway platform optimized to simplify small cell deployment in emerging markets.
- Millicom announced today that the international aid organization Oxfam and Tigo have signed an agreement to continue to distribute aid using mobile money to people in the areas of Guatemala that are the most affected by malnutrition.
- TIM Brasil has contracted with Cisco and Celcite to help improve data traffic.
- Chilean MVNO Falabella Movil has concluded its trials and officially launched operations with 17,000 active clients, according to local news reports.
- Vivo is implementing near field communications technology in Brazil with the Gemalto solution.
Be sure not to miss what’s happening in Latin America’s wireless markets. Check out RCR Wireless News wrap ups.