In a statement sent to the CNMV, Telefónica explains that this “revised” offer includes the possibility of long-term contracts for the use of the Oi group’s infrastructure. Furthermore, the offer is subject, amongst other conditions, to be considered as “first bidder,” allowing them the right to match the best offer presented.
Oi has put its mobile business up for sale, its most attractive asset, as part of its strategy to save the company. Oi declared insolvency in 2016, due to its continued loss of market share and debt of around 13 billion euros.
For Telefónica, Brazil is one of its priority markets along with Spain, Germany and the United Kingdom. In Q1, Brazil accounted for 20% and 25% of the group’s revenues and EBITDA, respectively. In fact, Telefonica is market leader with a share of 33% followed by TIM and Claro, with 24% each. The change from four to three operators would cut the competition in the Brazilian market. Oi is also present in areas where Telefonica’s influence is smaller.
For Bankinter’s analysts, it is very likely there will be no more offers, since the three main operators in the Brazilian market have joined forces. This is a move which Renta4’s experts consider as “the most appropriate formula” to convince the Brazilian competition authorities.
The competitive auction will be held in Q4’20.