Gloves off in fight for Vivo

15 Aug 2006

Henrique Granadeiro, the president of Vivo’s co-owner Portugal Telecom (PT), says he is willing to fight Spain’s Telefónica for control of Brazilian mobile network operator Vivo Participações, adding that it is wrong to assume that its Spanish partner is the best candidate to acquire full control of the unit. ‘The idea that Telefónica is the natural and inevitable purchaser of Vivo is completely absurd and I could never accept this idea,’ Granadeiro is quoted as having told Brazilian financial newspaper Valor Econômico. ‘The business trend [in the telecoms sector] is increasingly to focus on content transmission. And, seen from this perspective, the natural company to purchase Vivo would be PT, because the content between Brazil and Portugal is closer than between Brazil and Spain,’ he added.

BNamericas notes that Telefónica and PT each have a 50% stake in Vivo, but are believed to be in disagreement about the correct business strategy for it. PT opposes the decision to add a GSM network to Vivo’s CDMA infrastructure. The cellco confirmed its intentions to migrate to GSM in July and this week was reported to have selected Ericsson and Huawei as suppliers of the new USD500 million network. Telefónica is interested in buying out PT’s stake and believes it has the financial wherewithal to do so, but Granadeiro says his company’s stake is non-negotiable.

Brazil, Telefonica