Would Telefônica play dirty to defend its oligopoly?
Alert in the telecommunications market regarding the moves of the Spanish company Telefónica, owner of Vivo, in the press; the company will do everything to sabotage the proposal made by Egyptian billionaire Naguib Sawiris to buy TIM and preserve a minimum of competition in the Brazilian mobile phone market; Telefónica's objective is to buy TIM and divide it up with Claro and Oi, preserving a status quo of poor quality and abusive prices; the Spanish move was captured by columnist Sonia Racy.
247 - Everyone knows that cell phone service in Brazil is expensive and inefficient. The problem is that a behind-the-scenes move by the Spanish company Telefónica, owner of Vivo, could make the situation even worse. The company, which is part of the board of Telecom Italia, is reportedly willing to acquire control of TIM Brasil, eliminating its biggest competitor.
Since such a transaction would never be accepted by competition watchdogs like the Administrative Council for Economic Defense (CADE), Telefônica pulled a rabbit out of a hat and presented the Minister of Communications, Paulo Bernardo, with an indecent proposal. TIM would be bought, split up, and divided with Oi and Claro. This would make the Brazilian market even more cartelized and oligopolistic.
This plan, however, was hampered by the entry of a new player: Egyptian billionaire Naguib Sawiris, owner of the Orascom group, who made a US$20 billion offer to acquire TIM and thus preserve a minimum of competition in the Brazilian market.
Result: Telefônica allegedly began working behind the scenes to sabotage Sawiris' proposal. The maneuver was denounced by columnist Sonia Racy of Estado de S. Paulo. Read below:
Trimmm
Some people are seeing Telefonica's hand in the move – which has an interest in seeing TIM Brasil broken up – in the effort to discredit the proposal from Egyptian billionaire Naguib Sawiris.
The businessman wants to buy Telecom Italia's national subsidiary outright.