Brasil Telecom, TI given 22 days to resolve wireless licence dilemma

10 Oct 2006

Brazil’s third largest telecoms operator, Brasil Telecom Participacoes, and Italy’s Telecom Italia (TI) have been given 22 days to decide the fate of wireless licences belonging to TIM Participacoes (BrT GSM), covering the south, centre-west and parts of the north of the country, says the regulator Anatel on its website. The watchdog originally gave the pair 18 months to decide which licences to keep: that deadline expires on 28 October 2006.

Anatel’s demand relates to the fact that TI owns TIM Participacoes, Brazil’s number two mobile operator, while it is also a major shareholder in Brasil Telecom, the country’s third largest wireless player. Under Brazilian law no company may control two cellular operators in the same operating region. Although TI is no longer part of the controlling group of Brasil Telecom, it still has shares in the venture through holding company Solpart. TI has said it would consider selling the stake to Citigroup, a vehicle representing Brazilian pension funds, which is Brasil Telecom’s controlling shareholder. To that end, the Italian firm is planning to transfer its 38% stake in Solpart to a new company, Brasilco, which will be controlled by a trust operating under English law and managed by Credit Suisse, prior to selling the stake.