Telefonica has dismissed reports that it was planning to collaborate with Brazilian rivals in order to break up Telecom Italia’s Brazilian unit, TIM Brasil.
Telefonica’s Vivo is the country’s market leader, but the Spanish group recently increased its stake in Telco, which controls Telecom Italia. In 2010 the group specifically promised Brazilian truthbuster Cade that it would not do this, and so is now under pressure to reduce its dominance in the Brazilian mobile market.
Citing “reliable sources”, the Italian paper Il Sole 24 Ore claimed that the operator group was on the verge of forming an investment vehicle with Claro – a subsidiary of America Movil – and fourth-placed Brazilian operator Oi. The plan was reportedly to break up the operator unit TIM Participacoes - which is the second largest player in Brazil – with Claro and Oi each receiving certain assets.
However, in a statement the Spanish group said: “Telefonica would like to clarify that it is not part of any such vehicle and it has no details of any kind on any such potential transaction to disclose to the public for market evaluation.”
Telefonica added that it has not discussed a deal with Cade. The antitrust watchdog has ruled that the group must reduce its hold on the Brazilian market by divesting its holding in TIM Brasil or finding a new partner for Vivo.
Telecom Italia maintains that TIM Brasil is a strategic asset that it will not sell. The Italian incumbent’s directors are reportedly attempting to stymie any attempt by Telefonica to sell the Brazilian unit by stipulating that offers for TIM Brasil must be assessed by a specially-assembled committee.
