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Telecom Italia and AT&T weigh up investment options in Latin America

 Amid a frantic operator power struggle in Brazil, Telecom Italia is believed to be considering a bid for fixed-line operator Oi.

The move would be a complete reversal of a previous development, which saw Oi readying a bid for Telecom Italia’s subsidiary TIM Participacoes, the number two mobile operator in Brazil. Telecom Italia recently lost out to Telefonica in an attempt to acquire broadband provider GVT.

The acquisition would have allowed TIM Brasil to offer bundled services, easing the loss from falling voice revenues. Acquiring Oi would provide a similar opportunity by providing access to a fixed network.

TIM CEO Rodrigo Abreu has noted that the operator could well make an acquisition, saying: “We’re a company with a very low level of debt. We could make a move when an opportunity arises.”

Meanwhile, USA-based AT&T is considering investing in Mexico, according to chief strategy officer John Stankey. The executive noted at an investor conference that Latin America presented short and long term options for the group.

“If we weren’t looking at Mexico and Latin America more broadly and thinking about what opportunities there were to further shareholder returns down there, and begin to diversify our revenue sources, I think we’d be asleep at the wheel. So yeah, we are intrigued by it,” said Stankey.

The comments come shortly after America Movil reportedly approached several operators – including AT&T – with the goal of selling some of its Mexican infrastructure.

The asset sale is primarily motivated by regulatory reform aimed at challenging the dominance of the Carlos Slim-controlled operator. Conversely, this very regulation was cited by Stankey as a new factor that made the Mexican market more attractive.

 

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