Brazil’s smallest incumbent operator Oi has said it will sit out the country’s 700 MHz spectrum auction, which is set to begin on 30 September.
Oi’s rivals indicated they would participate in the tender months ago but Oi stayed silent, fuelling…
Brazil’s smallest incumbent operator Oi has said it will sit out the country’s 700 MHz spectrum auction, which is set to begin on 30 September.
Oi’s rivals indicated they would participate in the tender months ago but Oi stayed silent, fuelling speculation that the telco would not be able to muster the funds to acquire frequencies.
In July Carlos Baigorri, Anatel’s superintendent of competition, was quoted as saying that if any operator cannot afford to participate in the auction for the ‘beachfront’ airwaves then the market will want to break that telco up.
Telecom Italia, which owns Oi’s rival TIM Brasil, has been linked to a takeover of the stricken national champion.
Meanwhile, Oi has hired BTG Pactual to advise it on a potential acquisition of TIM, and America Movil said it is considering joining the company in a bid.
Oi’s share price rose more than 1.3% following the confirmation that it would not look to bid for 700 MHz licences.
In a statement, Oi said it already has a diversified spectrum portfolio and would instead invest in improving its current mobile, fixed-line, broadband, and pay-TV services “under a national multi-product and convergence strategy”.
Oi added that in terms of 4G services, it has 2.5 GHz spectrum to serve its clients and meet its coverage obligations through 2017, and that it may utilise 1.8 GHz spectrum in the future.
In its Q2 results released in August, Oi disclosed net debt of R$46.2bn (US$19.3bn) which has been downgraded to junk status by the ratings agencies. Its first set of quarterly results since it acquired Portugal Telecom’s assets saw it record a R$221m (US$92m) loss.
Oi has continued to offload non-core assets to improve its financial profile so it can invest in growth opportunities in Brazil. In mid-September it resolved to sell the 75% stake in Africatel it inherited in its merger with Portugal Telecom, which could fetch at least US$2bn.
