After much speculation, Telecom Italia’s board of directors approved an investigation into potentially integrating its Brazilian unit, TIM, with rival operator Oi. Earlier this year, Oi saw its attempt to merge with Portugal Telecom fall apart after Rioforte defaulted on €897 million ($1.12 billion) debt held by Portugal Telecom.
The Telecom Italia decision follows Telefónica’s planned acquisition of GVT in Brazil. It also comes at a time when TIM is facing a very competitive mobile market. TIM has the second-largest share of the Brazilian market with 26.89% behind Vivo with 28.66%. Claro is in third place with 25.01%. Oi is fourth with 51.4 million mobile users, 18.47% of the total market.
Telecom Italia said it wanted to empower the company’s managers to examine the options for a possible integration between TIM and Oi in depth. However, the board should be paying attention to some aspects of the proposed deal, since the resulting business has to be profitable for Telecom Italia’s shareholders and not interfere with the carrier’s goal to reduce its net debt that totaled €26.6 billion ($33.27 billion) at the end of September.
In another move, TIM agreed to sell its towers to U.S.-based American Tower.
Argentina’s spectrum auction: América Móvil’s Argentinian subsidiary Claro was awarded spectrum to deploy 3G and 4G. The carrier won the public bid against Telefónica’s Movistar, Personal and Arlink. Claro was awarded six 3G bands for three areas of operation and two frequencies for 4G coverage throughout the country, according to Argentina’s Ministry of Communications. The agency noted that “once the payment is made, Claro will be allowed to start using the 3G portion acquired, and initiate the deployment of infrastructure to provide 4G service.”
Smartphone momentum: A new GSMA study showed accelerating smartphone adoption and rapid migration to mobile broadband networks in the region. According to Anne Bouverot, GSMA director general, the rapid technology migration in Latin America is proving to be a catalyst for new products and services that are playing a key role in addressing many of the region’s social, economic and public service challenges, enabling financial and digital inclusion, among others. There were 718 million mobile connections in Latin America at the end of September. Of that total, 2G accounts for 60%, but that share will shrink to about 20% of the expected 956 million connections by 2020.
More Latin American news:
COLOMBIA – The spectrum regulatory agency ANE released a proposal to assign spectrum to the “Internet of Things.” The plan, which still needs to be approved, allocates about 50 gigahertz in new bands to meet the data traffic demand for the IoT.
LATAM – NII Holdings announced a restructuring agreement plan to be implemented in its bankruptcy proceedings in New York, following negotiations between the company and stakeholders.
BRAZIL – Antitrust regulator Cade has started to analyze the acquisition of GVT by Telefónica. No deadline has been released.
CHILE – The country’s three largest mobile operators, Entel, Claro and Movistar, saw their average revenue per user decline by 20% in the past year.
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