Cash-strapped Brazilian telecoms operator Oi is in talks with Telefonica and Telecom Italia Group over the planned sale of its mobile network, Reuters reports, citing five people with knowledge of the matter. Telefonica owns mobile market leader Vivo, while Telecom Italia controls TIM Brasil, the nation’s second largest cellco. Oi has also staged preliminary talks with AT&T Inc and an unnamed Chinese company and hopes to pique the interest of other players not yet active in Brazil, sources added.
Oi expects to raise more than BRL10 billion (USD2.4 billion) from the sale of its mobile unit, which it hopes will help it avoid insolvency. Proceeds from the sale would be used to the telco’s fibre-to-the-home (FTTH) network, which is considered key to the company’s growth. Although the sale of the entire company has not been ruled out, this type of deal is considered unlikely.
According to TeleGeography’s GlobalComms Database, Oi filed the largest bankruptcy request in Brazil’s history in June 2016, after failing to reach an agreement with its creditors. The filing, which covered Oi and six subsidiaries, listed BRL65.4 billion of debt and the company chose judicial reorganisation to preserve the value of its holdings and to continue providing services to its customers.