Brazilian operator may sell mobile business

Brazilian operator may sell mobile business

Brazilian telecommunications firm Oi SA is said to be in talks with Spain’s Telefonica and Italy’s Telecom Italia to sell its mobile network.

News agency Reuters has reported that Oi, Brazil’s largest fixed-line carrier, hopes to raise $2.4 billion by selling its mobile operation, which has some 35 million customers. Oi filed for bankruptcy protection in June 2016 to restructure debts estimated at around $15.7 billion.

Although there has been no comment from Telefonica and Telecom Italia, it understood that talks with both companies have been ongoing. Telefonica owns mobile market leader Vivo, while Telecom Italia controls TIM Brasil, the nation’s second largest cellular operator. Oi is said also to be in talks with other companies not at present operating in Brazil.

Proceeds from any sale would most likely be used to boost Oi’s fibre-to-the-home (FttH) broadband service, considered key to the company’s growth. Oi currently has around 360,000 kilometres of fibre in Brazil. Its infrastructure is also used by other carriers.

Although current talks have focused on Oi’s mobile network, the sale of the entire company is not being ruled out, though it is much less likely, according to Reuters.

It is not clear what could happen if Oi runs out of cash: it is possible that millions of Brazilians could be left without service or that the regulator, Anatel, could be forced to intervene.

The sale of its mobile division and other core operations, the issuance of debt backed by proceeds of future asset sales, and the sale of its stake in Angolan carrier Unitel to some of its current shareholders are all strategies that could raise money. However, a confident prediction of what the future holds for the troubled company is, at the moment, almost impossible.

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