Brazilian telecoms operator Oi has received a joint bid from its three rivals to acquire its mobile business unit, as the firm searches for cash to fight back against bankruptcy.

While there are still several questions to be answered, it appears the trio of surviving mobile network operators are taking a collaborative approach to buy out the fourth. This is not to say the bid will be accepted by Oi, a company which is facing severe financial strain currently, but it would represent a contraction in competition for the market.

“TIM acknowledges that its subsidiary in Brazil TIM SA, jointly with Telefonica Brasil SA and Claro SA, has submitted a binding offer for Oi Group’s mobile business,” the trio said in a statement.

“The joint binding offer remains subject to some conditions. In particular, the selection of the offerors as ‘stalking horse’ (‘first bidder’) condition which grants the offerors with a right to match potential other bids presented in the context of the competitive sale process of Oi Group’s mobile business.”

The bidding process for Oi’s mobile network began in June with the telecoms operator placing a $2.8 billion price tag on the unit. After attempting to make the converged (bundled) connectivity business model work, it appears the weight was too much for the spreadsheets to bear.

Aside from supercharging its fibre business unit, the cash would also be used to pay off debts the business has collected over the years. The wider story sees Oi fighting to exit bankruptcy protection, a state the company has been in since 2016 when it filed a recovery plan with local authorities.

While the collaborative approach from the trio of rivals is certainly an interesting turn of events, few would have seen this coming, it does demonstrate the difficulties in making connectivity work in developing markets. Brazil is a tricky market thanks to low ARPU, sparsely populated regions and challenging geographical landscapes. It has always been labelled an economy with significant potential, however it has yet to fulfil the promise to date.

With this bid, there are still some very pressing questions which are yet to be answered by the trio, Oi or the regulatory authorities:

How much are the trio offering? Financial details are an unknown for the moment, however, Oi has already said it will not entirely base the decision on who to sell to on price. $2.79 billion is the minimum price it has stated in the past, however Oi is after cash quickly; the speed the transaction is completed is also a factor, which could see the financially strained telco elect for less cash.

Will it be accepted by the regulator? Should Oi’s mobile network be sold to the three mobile rivals, this would reduce competition in the market. Regulators generally don’t like reduced competition, however, the number of MNOs needs to be balanced against a sustainable landscape; it does appear the Brazilian market is not at a point where it can organically support four MNOs.

Who else is interested? There are rumours a wealth fund from the Middle East is also involved in the bidding process, which could look more attractive to the regulator, as four independent MNOs would be retained, more foreign investment would flow into the country and a disruptive telecoms operator could emerge. This fund might also offer Oi more cash.

How could this network operate in the future? Similar to the UK, the Oi network could be run as a joint venture for the trio, pooling investment as a shared network to make the economics of deployment more attractive. The network could also be split, and portions integrated into the rivals existing footprint depending on the needs. There is no comment for the moment, therefore this is nothing more than speculation.

Presumably, these questions will be answered in the near future, though perhaps consolidation of mobile network operators will be the healthiest scenario for the market currently.