Brazil’s third largest fixed line operator by subscribers Oi (formerly Telemar) is seeking to merge with rival telco Brasil Telecom (BrT), reports BNamericas citing local press reports. The move comes hot on the heels of a government announcement confirming it will study the feasibility of the operation. Oi chief executive Eduardo Falco says such a tie-up could create greater competition in the market, rather than limit it, which critics of the merger fear. Speaking at a conference organised by the national pay television association ABTA in São Paulo, Falco said Brazil was in need of a second national backbone and more than one mobile operator with penetration across the whole country. Embratel is currently the sole operator with a national backbone. It is understood the Brazilian government is backing the merger as it wishes to see a strong national player emerge to compete with regional telecoms giants Telefonica and Telmex.