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GVT-TIM Fusion Imminent

vivotel

Source: EXAME

The new Minister of Communications has a well-defined mission: to promote, to the extent possible, the regulation of the Brazilian media sector. It will be an institutional assault aimed directly at the billionaire families and powerful industry figures such as the Marinhos, the Civita, the Mesquita, the Frias, and others. Berzoini has made his position clear: he opposes over-concentration and interlocking directorship in the sector. Will he be able to realize this mission?

Freely translated: C. Brayton

GVT: deal with TIM is valued at US$ 9.2 billion, but must still pass muster with the capital markets regulator, Cade, the Administrative Board of Economic Defense.

Brasília – TIM’s attempt to avoid the purchase of GVT by Telefônica with an appeal to CADE did not prevent the National Telecommunications Agency (ANATEL) from green-lighting the deal.

In its final session of the year, on December 22, the board of directors of ANATEL ruled in favor of the deal.  Valued at US$ 9.2 billion, it must still pass muster with CADE, where TIM is attempting to prohibit the deal. TIM succeeded in obtaining from CADE the right to participate as an interested third party, according to a communique published in yesterday’s federal Official Diary.

The Italian interest in competing for the acquisition of the Brazilian firm was never mentioned during the Anatel public hearing, where board members limited themselves to matters related to the rights of the consumer.

Anatel imposed some conditions on its approval. Telefônica will have to maintain, at very least, its current geographical coverage of fixed telephony, cell phones and pay TV currently offered by the two companies. It was agreed that the current contracts between GVT and its clients will maintain the same conditions for at least 18 months. Telefônica will have 90 days to present the agency with an expansion plan for its networks and services.

The share transaction will be conducted in two stages. Yesterday, Anatel approved the first of these, in which Vivendi will continue to hold 12% of GVT shares.  In the second stage, in which 100% of control of the operator will be transferred, the agency is expected to agree as well.

The sale of GVT to the Spanish Telefônica, which owns the Vivo cellular network in Brazil, was announced in September. The deal leaves Telefônica with 30.6% of broadband capacity, giving it the musculature needed to dispute Net (of the Mexican Américal Movil) for market leadership.

Experts say the fusion of GVT and Telefônica will result in very little overlap. GVT is strong in areas surrounding São Paulo, where Telefônica is present in the market for fixed line. GVT, which has no mobile holdings, operates in 20 states and the Federal District, whereas Telefônica operates everywhere in Brazil, but strictly in the cellular market.

Telco

Other transformations in the puzzle of the telecoms were also received another decision yesterday. Anatel approved the scission of Telco, a holding company that controls Telecom Itália, and indirectly, TIM Brasil as well. The breakup directly affects Telefônica’s stake in the company, imposing the elimination of

vivotel

Source: EXAME

The new Minister of Communications has a well-defined mission: to promote, to the extent possible, the regulation of the Brazilian media sector. It will be an institutional assault aimed directly at the billionaire families and powerful industry figures such as the Marinhos, the Civita, the Mesquita, the Frias, and others. Berzoini has made his position clear: he opposes over-concentration and interlocking directorship in the sector. Will he be able to realize this mission?

Freely translated: C. Brayton

GVT: deal with TIM is valued at US$ 9.2 billion, but must still pass muster with the market  regulator, Cade, the Administrative Board of Economic Defense.

Brasília – TIM’s attempt to avoid the purchase of GVT by Telefônica with an appeal to CADE did not prevent the National Telecommunications Agency (ANATEL) from green-lighting the deal.

In its final session of the year, on December 22, the board of directors of ANATEL ruled in favor of the deal.  Valued at US$ 9.2 billion, it must still pass muster with CADE, where TIM is attempting to prohibit the deal. TIM succeeded in obtaining from CADE the right to participate as an interested third party, according to a communique published in yesterday’s federal Official Diary.

The Italian interest in competing for the acquisition of the Brazilian firm was never mentioned during the Anatel public hearing, where board members limited themselves to matters related to the rights of the consumer.

Anatel imposed some conditions on its approval. Telefônica will have to maintain, at very least, its current geographical coverage of fixed telephony, cell phones and pay TV currently offered by the two companies. It was agreed that the current contracts between GVT and its clients will maintain the same conditions for at least 18 months. Telefônica will have 90 days to present the agency with an expansion plan for its networks and services.

The share transaction will be conducted in two stages. Yesterday, Anatel approved the first of these, in which Vivendi will continue to hold 12% of GVT shares.  In the second stage, in which 100% of control of the operator will be transferred, the agency is expected to agree as well.

The sale of GVT to the Spanish Telefônica, which owns the Vivo cellular network in Brazil, was announced in September. The deal leaves Telefônica with 30.6% of broadband capacity, giving it the musculature needed to dispute Net (of the Mexican Américal Movil) for market leadership.

Experts say the fusion of GVT and Telefônica will result in very little overlap. GVT is strong in areas surrounding São Paulo, where Telefônica is present in the market for fixed line. GVT, which has no mobile holdings, operates in 20 states and the Federal District, whereas Telefônica operates everywhere in Brazil, but strictly in the cellular market.

Telco

Other transformations in the puzzle of the telecoms were also received another decision yesterday. Anatel approved the scission of Telco, a holding company that controls Telecom Itália, and indirectly, TIM Brasil as well. The breakup directly affects Telefônica’s stake in the company, imposing the elimination of political rights that the Spanish companies currently enjoy and obliging it to withdraw all its equity in the company.

With this decision, Telefônica will remain a shareholder of Telco for another 18 months. During this period, the telecoms operator loses the right to vote and to cast a veto in shareholders meetings, and is prevented from naming board members and members of the executive team.

According to Anatel, João Rezende, this is a “reasonable deadline” to carry out this withdrawal. The ANATEL ruling is meant to avoid meddling by Telefônica in Telecom Itália. The Spanish firm owns Vivo in Brasil and competes head to head with TIM in the mobile telephone market.

The suspension of political rights imposed on Telefônica involves the subsidiaries TIM Celular and Intelig Telecomunicações. The decision was in line with what Telefônica expected and the company sent a message to CADE, which has not yet commented on the matter. This information is from the daily O Estado de S. Paulo.

political rights that the Spanish companies currently enjoy and obliging it to withdraw all its equity in the company.

With this decision, Telefônica will remain a shareholder of Telco for another 18 months. During this period, the telecoms operator loses the right to vote and to cast a veto in shareholders meetings, and is prevented from naming board members and members of the executive team.

According to Anatel, João Rezende, this is a “reasonable deadline” to carry out this withdrawal. The ANATEL ruling is meant to avoid meddling by Telefônica in Telecom Itália. The Spanish firm owns Vivo in Brasil and competes head to head with TIM in the mobile telephone market.

The suspension of political rights imposed on Telefônica involves the subsidiaries TIM Celular and Intelig Telecomunicações. The decision was in line with what Telefônica expected and the company sent a message to CADE, which has not yet commented on the matter. This information is from the daily O Estado de S. Paulo.