Government mulls rule change for Vivo-TIM Brasil merger

1 Feb 2008

The government of Brazil is reported to be considering plans to allow a tie-up between foreign-owned mobile operators Vivo and TIM Brasil, by way of compensation, should it decide to forge ahead with a plan to change the legal framework to allow two Brazilian-owned operators – Oi (Telemar) and Brasil Telecom – to merge. Reuters reports that the O Estado de Sao Paulo daily quoted an unnamed government source as saying negotiations are under way concerning a change to the regulatory framework, which currently does not allow one controlling group to have two concessions, among other limits. The state is believed to be looking at ways to remove regulatory hurdles to allow for an acquisition of Brasil Telecom by Oi Participacoes, in a move that would create a huge Brazilian telecom holding to compete with foreign rivals such as Telefonica or Mexico’s America Movil.

Brazil, TIM Brasil