Brasil Telecom and Telecom Italia in public row

17 Nov 2003

Brasil Telecom has become involved in a heavy dispute with its largest shareholder Telecom Italia over its attempts to gain a mobile licence in the country. Brasil Telecom applied to the Brazilian regulator Anatel for a cellular licence earlier this year, but Telecoms Italia is looking to block the move, which it claims is being driven by one shareholder, the Opportunity Fund, and is not in the best interest of the other parties. However, rumours have emerged that the real reason behind Telecom Italia’s stance is that its mobile arm TIM already has operations in Brazil’s wireless market and it wants to keep competition to a minimum. Telecom Italia has denied these allegations, but is hoping that it will be able to block the sale through an agreement made earlier this month to take its share in Brasil Telecom back up to 38%, giving it veto power over all strategic decisions.