NII gets government backing for Unicel purchase, report says

14 Nov 2012

NASDAQ cites analyst blog Zacks Equity Research as saying that US-based NII Holdings Inc, which offers wireless service through its Nextel brand in Latin America, has received the go-ahead from the Brazilian government to buy privately owned cellco Unicel do Brasil Telecomunicacoes (Unicel, trading under the banner Aeiou) to provide its Nextel Brasil subsidiary with additional network capacity in the Sao Paolo metropolitan area. The unconfirmed report claims that the industry regulator Anatel has supported NII Holdings’ earlier filing of a ‘change of control request’ and now also has the support of the government for a deal that will cost in the region of BRL370 million (USD181 million). As reported in yesterday’s CommsUpdate, the government was said to be considering whether to sanction the plan for Nextel to acquire Unicel as a way of increasing competition in the mobile market. Brazil’s big four – Vivo, Claro, TIM Brasil and Oi SA – cannot bid for Unicel as they each hold the maximum 80MHz of spectrum permitted under local law, however Nextel owns just 20MHz.

NII Holdings reported a dramatic spike in customer churn in 2Q12, due in the main to its ongoing delays in rolling out commercial 3G services in Brazil and across Latin America as a whole. It now plans to launch in Brazil by the end of this year and has paid out USD595 million to buy spectrum covering Sao Paulo, Rio de Janeiro and Brasilia. It hopes to better compete with the big four and the acquisition of Unicel could further this goal. Unicel, which is 49% owned by Saudi-based HiTS Group, offers GSM service under the Aeiou brand, began operations in Sao Paulo in August 2008, and has acquired an extension of 2.5MHz spectrum in the 900MHz band to support its business.

Brazil, Claro-nxt (formerly Nextel Telecomunicacoes), NII Holdings, Unicel do Brasil Telecomunicacoes (Aeiou)