Brazilian antitrust regulator CADE (Administrative Council for Economic Defence) has dismissed an appeal by Claro Brasil against a network sharing deal signed by its rivals TIM Brasil and Vivo.
The agreement was first announced in December 2019, with TIM Brasil and Vivo revealing that they would launch a new 2G network covering 2700 cities. In addition, the operators planned to set up a shared 3G/4G network to push coverage to smaller cities with populations of fewer than 30,000 residents.
CADE concluded its review of the deal in April this year, and the following month Claro launched its appeal against the agreement, claiming that the watchdog “did not deeply address relevant points related to the potential anti-competitive effects of the operation.”
Claro’s objection is likely rooted in the fact that its larger rivals would be able to dominate the market more effectively through the deal. TIM Brasil and Vivo are planning a network consolidation programme that could cover 1600 cities, and are looking to expand 3G and 4G coverage to areas where Claro has no footprint.
However, CADE affirmed its support for the network sharing deal. In its rejection of Claro’s appeal, the body noted that “generating cost savings in infrastructure implementation is a legitimate purpose from a competitive point of view.”