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Oi out of 700MHz 4G auction, Algar in [TeleGeography CommsUpdate]
[September 24, 2014]

Oi out of 700MHz 4G auction, Algar in [TeleGeography CommsUpdate]


(TeleGeography CommsUpdate Via Acquire Media NewsEdge) Brazilian telco Oi SA (Oi) has reportedly decided not to participate in the government's forthcoming auction of 4G mobile spectrum in the 700MHz band, which is due to commence next week, increasing speculation that it may become a takeover target in the country's intensely competitive wireless market. Telecoms watchdog Agencia Nacional de Telecomunicacoes (Anatel) will hold its much anticipated auction of 4G-suitable spectrum on 30 September and hopes to raise more than BRL8 billion (USD3.5 billion) through the sale. Interested parties were required to submit the necessary documentation by 23 September, with all the country's main players – Telefonica Brasil (Vivo), Telecom Italia-back TIM Brasil, America Movil's Claro (Brasil) unit and Oi – initially expected to bid.*Rivals Vivo, TIM Brasil and Claro are known to have handed in their sealed bids by the Tuesday deadline, while according to Ultimoinstante News Today, Algar Telecom (formerly CTBC) earlier confirmed that it too is keen to participate in the 4G auction. However, Oi says it holds adequate bandwidth in the 2.5GHz range to meet its customers 4G needs until 2017, and would be able to use part of its bandwidth in the 1.8GHz range in the future. Oi was not immediately available for comment, but its decision leaves it potentially exposed.*As previously reported by TeleGeography's CommsUpdate, in July this year the superintendent of competition at Anatel, Carlos Baigorri, said that the regulator considers Oi – the country's most indebted telco – as the weakest domestic operator and a candidate for breakup if it fails to secure licences at the upcoming wireless frequency auction. 'What will happen with market consolidation will depend on the 700MHz auction – it will define the future of telecom in Brazil,' Baigorri said in an interview at the time. 'The company that doesn't win in the auction, the market will very probably want to break up.' In the superintendent's opinion any Brazilian operator missing out at the auction would be 'at risk', although he declined to comment on how any breakup would unfold. 'We have to see which will be Oi's priorities in its turnaround, what role the 700MHz auction will have,' said Baigorri, adding 'If, for example, Oi can't raise the funds to participate, which I hope they can do, probably Oi will be broken up.' Oi selected Brazilian investment bank BTG Pactual last month to explore a possible joint bid for TIM Brasil with America Movil, which also expressed interest. Since then, TIM's Italian parent has also be linked to a possible counterbid to take control of Oi.



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