The ongoing story of Brazilian digital infrastructure solutions company and neutral fibre optic network owner V.tal’s plans to buy financially troubled telecommunication company Oi's broadband unit has taken a positive turn as Brazilian competition regulator Cade has approved the purchase – though it’s far from over yet.
One of the regulator’s units, the General Superintendence of Cade (SG-Cade), has approved without restrictions the purchase by V.tal of Oi's fixed broadband customer unit (ClientCo – operating under the name of Oi Fibra).
In making its decision, the regulator decided that, as ClientCo already operates 100% through V.tal's infrastructure network, any vertical integrations are pre-existing. It also took into consideration idle capacity in V.tal's telecommunications network, which will continue to operate as an independent neutral network.
In addition, it has taken into account that the business model adopted by V.tal is based on neutrality towards telecommunications service providers. It also believes there is adequate competition from other players.
According to news resource TeleTime, Cade analysed not only the broadband market, but also the fixed switched telephone service market. ClientCo still has 3.6 million IP fixed telephony customers who will now join V.tal. In broadband there are about 4 million customers.
V.tal acquired ClientCo's operation for BRL5.6 billion (about US$933.5 million) as part of Oi’s ongoing recovery plans. Although it was supposedly a competitive process there were no other bids, most likely because it was an operation that would have to go through V.tal's network.
The process is not over yet. Telecom regulator Anatel's approval is still pending.
