Spanish incumbent and Latin American regional player Telefonica has increased its offer to buy the 50 per cent of Brazilian firm Brasilcel that is owned by its co-investor Portugal Telecom to €6.5bn.

Telefonica had previously offered €5.7bn for the stake, an offer that was rejected, leading the Spanish incumbent to suggest that a hostile takeover bid for its Portugese counterpart – in which it already holds a ten per cent stake – remained an option if a sale of the Brasilcel stake could not be agreed.

Brasilcel owns 60 per cent of mobile player Vivo, which leads the Brazilian mobile market and had 53.9 million subscribers at the end of the first quarter this year, according to data from Informa’s WCIS.

Telefonica is keen to merge the Vivo operation with its Brazilian fixed arm Telesp, in a bid to drive cost synergies in the market, a move which Portugal Telecom views with scepticism.