Alternative operator Nextel Brazil is looking to acquire troubled operator Unicel, known for its Aeiou brand, according to a local media report.
Unicel, which accumulated significant amounts of debt, filed for bankruptcy in 2011. However the operator…
Alternative operator Nextel Brazil is looking to acquire troubled operator Unicel, known for its Aeiou brand, according to a local media report.
Unicel, which accumulated significant amounts of debt, filed for bankruptcy in 2011. However the operator still has spectrum licences in the 1.8GHz and 1.9GHz bands in a number of regions – crucially Sao Paulo – which Nextel is said to be keen to acquire.
An earlier acquisition of spectrum by Unicel was mired in political controversy with suggestions that it obtained the licences for less than the market rate. The then chief of staff to President Lula stepped down in 2010 amid accusations that she used her influence to help certain companies, including Unicel.
According to local paper Folha De Sao Paulo Unicel has R$500m (US$243m) of debt and Nextel would pay R$370m (US$179m) for the troubled telco.
However, it is unclear whether regulator Anatel would allow Nextel to acquire the licences and a decision could also depend on the structure of a transaction.
According to Marceli Passoni, senior analyst at Informa, Nextel is unlikely to face issues if it buys Unicel as a whole. However, in Brazil spectrum has to be auctioned so if it pursued acquiring the licences only, and no other assets of the bankrupt operator, a deal might run into difficulties.
Passoni also noted that Nextel’s competitors might find ways to legally challenge a deal.
“Considering the polemic around Unicel’s spectrum acquisition – very cheap and with government involvement/scandal – I think operators will give Nextel a hard time,” she said in an email.
In spite of their protests, the large operators – Claro, Oi, Tim and Vivo – have reached their spectrum ownership limit of 80MHz. Nextel on the other hand can acquire more licences and even if it bought Unicel it would still be below the limit.
Passoni added that the big operators want to ensure that Nextel pays a fair market price for the licences after their hefty payout for new frequencies in June.
Nextel is a subsidiary of US-based, LatAm-focused NII Holdings and has roughly four million subscribers in Brazil.
