The telecoms press is waxing lyrical about the race to acquire Brazilian broadband provider GVT, a move that will reshape the country's telecoms market.

Barely a day has gone by in the past couple of weeks without a fresh report – normally citing unnamed sources – of developments in Brazil as European heavyweights Telefonica and Telecom Italia mull their options.

To summarise the situation, Telefonica made a cash and stock offer worth €6.7 billion for GVT in early August and, a fortnight later, Telecom Italia confirmed that it too was interested in the company. Then followed a slew of reports from the newswires, including claims that Telecom Italia will make an offer valued at €7 billion that includes handing over a 20% stake in itself to GVT parent Vivendi, and that Telefonica will match its European peer's offer by including a content-sharing element in its own bid.

The draw for both companies is clear: scale and a stronger fixed market presence. And whichever of the two comes out ahead, the shape of the market will change.

America Movil, which is present in Brazil through mobile operator Claro and fixed line and pay TV operators Embratel and Net Serviços, generated revenues of 17.4 billion reais (€5.8 billion) in the country in the first half of this year, according to local consultancy Teleco. That makes it the market's biggest operator by sales, slightly ahead of Telefonica's Vivo with BRL17.2 billion. As such, the acquisition of GVT would propel Telefonica into the lead; GVT's revenues came in at BRL2.7 billion.

Telecom Italia has a smaller presence in Brazil, but the addition of GVT into its portfolio would give it a boost without changing its market ranking. TIM Brasil posted revenues of BRL9.5 billion in the first half, making it the fourth largest player. Combined with GVT it would move much closer to local player Oi, which generated BRL13.8 billion in revenues.

In terms of total accesses though, TIM + GVT would leapfrog Oi and the combined company's 82.9 million connections would make it a credible competitor to the big two: America

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