Sonaecom may lose PT networks

24 Aug 2006

Sonaecom may have to sell off Portugal Telecom’s wireline infrastructure if it is to receive approval for its EUR11.1 billion hostile takeover bid. Citing Jornal de Negocios, AFX reports that the country’s competition authority AdC intends to demand on the sale if it is to give Sonaecom’s proposals the green light. Portugal Telecom’s wireline division PTC still controls the vast majority of the country’s local telephone lines. Portugal Telecom has devised a defence strategy against the bid, under which it would merge PTC with its mobile division TMN, creating a new company called PT Portugal. It would also spin off its 58% cable TV subsidiary PT Multimedia.

Meanwhile, Portugal’s second largest cellular operator, Vodafone, has restated its opposition to the takeover. It says the conditions proposed by the AdC are insufficient and the merger of Sonaecom and PT would hamper competition in the mobile sector. Sonaecom controls the country’s third cellular operator, Optimus, while PT’s TMN leads the market; between them they account for around 60% of all subscribers. A final decision from the competition authority is expected within the next week.

Portugal, Altice Portugal (MEO), Optimus (Clix), Vodafone Portugal