Saturday, 21 October 2017

China Mobile eyes Brazil entry with Oi buy

By Mary Lennighan, Total Telecom
Monday 25 September 17

World's biggest mobile operator in talks with Brazilian regulator on telco acquisition; could look to shed fixed assets

China Mobile is keen to buy beleaguered Brazilian telecoms operator Oi and has held talks with regulator Anatel on the subject, according to a local media report. The Chinese operator has met with officials from Anatel to explore its options for investing in Brazil, including taking over Oi, which is currently operating under bankruptcy protection…

China Mobile is keen to buy beleaguered Brazilian telecoms operator Oi and has held talks with regulator Anatel on the subject, according to a local media report.

The Chinese operator has met with officials from Anatel to explore its options for investing in Brazil, including taking over Oi, which is currently operating under bankruptcy protection, Brazilian business publication Exame claimed late last week, citing three unnamed sources.

The telco opened an office in Sao Paolo this month, the magazine noted.

Its sources claim that China Mobile has two key points to resolve in its talks with the regulator. It is looking to have fines accumulated by Oi erased, and it is exploring the possibility of divesting Oi's fixed-line business to focus on its mobile operations.

Anatel president Juarez Quadros met with China Mobile and the China Development Bank in Brasilia on 11 September, Exame said. The regulator confirmed that Oi was the subject of the meeting.

However, the talks are at a preliminary stage, the publication said.

Oi filed for bankruptcy protection in June 2016 and has thus far failed to agree a recovery plan with creditors.

According to a China Daily report, Anatel is the telco's largest creditor, Oi having racked up US$3.5 billion worth of unpaid fines over 20 years.

Oi was required to present a recovery plan to Anatel by 23 August, but missed that deadline, the paper said.

According to Anatel's latest figures, Oi had 6.43 million fixed broadband connections in July, giving it a 23% market share and making it the third largest player behind America Movil's Claro and Telefonica-owned Vivo. At just 0.48% year-on-year, its growth rate was lower than its larger rivals though.

On the mobile side, Oi recorded negative growth in the 12 months to the end of June, its customer base declining by 5.52 million to 42.03 million for a 17.4% market share.

By contrast, market leader Telefonica reported 1.4% growth over the same period to 74.34 million customers, Anatel said, while second and third placed TIM and America Movil lost 3.16 million and 3.99 million customers respectively, widening their lead over Oi.

China Mobile is the world's largest mobile operator by some margin, claiming a domestic customer base of 873.73 million at the end of August, thanks to consistently healthy growth; it added 3.87 million customers during August.

Its fixed broadband base is more modest, standing at 98.93 million at end-August, monthly additions coming in at 3.19 million.
 

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