TIM-Oi possible deal could have less regulatory problems than previous consolidation attempts
The possible acquisition of TIM Participacoes by Oi could be more easily approved by Brazilian regulators than other previous consolidation moves, such as the stake increase in Telecom Italia by Telefonica, a newswire reported.
Citing one source close to the Brazilian government, Reuters said Oi and TIM would have fewer problems with license overlaps. TIM and Oi each acquired a 10 + 10 MHz spectrum in the fourth-generation mobile service auction which took place in 2012, while the other two operators, Claro and Vivo, acquired 20 + 20 MHz spectrum. Thus, TIM and Oi would not exceed the regulatory limit of the spectrum in that range.
According to the same source, the possible TIM-Oi deal would be easier to approve from an antitrust point of view than a possible indirect control of TIM by Telefonica through a stake hike of the Spanish group in Telecom Italia. Telefonica owns Vivo, Brazil's largest telco, while Telecom Italia is TIM’s controlling shareholder, noted the Portuguese-language report.
A deal between the fourth (Oi) and the second (TIM) largest companies in the Brazilian telecom market is easier to be approved than a deal between the first (Vivo) with the second, the source was quoted as saying. Vivo has 28.7% market share in Brazil, followed by TIM with 26.9%, Claro with 24.9% and Oi with 18.5%.