Treasury okays Oi/BrT merger

8 Jul 2009

BNamericas reports that Brazil’s economic monitoring agency Seae, a department within the Treasury, yesterday recommended the approval without conditions, of Telemar Norte Leste (Oi’s) takeover of fellow Brazilian operator Brasil Telecom (BrT), according to a lawyer familiar with the situation. The deal is however, still subject to the approval of the country’s supreme antitrust watchdog Cade.

In a separate development, Oi has revoked five franchise licences in the city of Sao Paulo, local press reported. The move comes after a dozen of the telco’s 19 franchises in the city said they intended to file a lawsuit against Oi, alleging that the operator misled them in its business strategy and is now trying to strip them of their territorial exclusivity. The smaller groups maintain that Oi, which launched there in 4Q08, promised them returns of BRL300,000 (USD153,000) in the first three months of operations, with that figure set to rise to BRL1.8 million by the start of year three. However, the returns so far have fallen well short of these promises and the franchises argue that Oi’s business model has if anything resulted in losses of around BRL1 million for each franchise.

Brazil, Brasil Telecom (BrT), Oi