news


US firm swoops into Brazil with Oi bid

It’s three domestic rivals might have teamed up to buy out the competition, but it appears US private equity firm Colony Capital sees potential in the Brazilian telecoms market.

With Oi’s mobile business unit up for purchase, one might have expected market consolidation was on the horizon. It does not appear four mobile telecoms players can be supported in the market organically, and a joint bid from Telefonica, Claro and Telecom Italia would have put an end to the fourth rival, but not just yet.

Following the joint bid from the trio of connectivity incumbents, Colony Capital’s subsidiary Highline do Brasil has tabled its own offer. Details of the bid are being kept under wraps for the moment, though Oi has said it exceeds the c.$2.79 billion floor price set during the initial sale process.

Telefonica, Claro and Telecom Italia might become slightly irritable with the potential of a new player entering the market, though this is perhaps an outcome which would be favoured by the national regulator. No watchdog would want to see competition contract in the market, though this would have to be balanced against the wider health of the industry.

It is always worth bearing in mind that reduced competition is probably the lesser of two evils, should the alternative financially strain the telecoms operators, inhibiting the ability to upgrade infrastructure.


Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Polls

What would be the future role of satellite communications?

Loading ... Loading ...