Telefónica Brazil expects to incorporate Oi Telecom’s assets this year

RIO DE JANEIRO, BRAZIL – The president of Telefónica Brasil, Christian Gebara, expressed on Wednesday (28) his confidence that the telecommunications company Oi, acquired at auction together with its other two major competitors in the local market, will be incorporated before the end of the year.

“The expectation of approval is for this second semester. An approval in all spheres, both on the regulatory and competitive sides,” Gebara said in a teleconference with journalists to comment on the company’s second-quarter results.

At the end of January, the Brazilian subsidiaries of Spain’s Telefónica (Vivo), Mexico’s América Móvil (Claro), and Telecom Italia (TIM) formalized the contract for the purchase and sale of Oi’s mobile network, worth R$16.5 billion (about US$3.2 billion).

Oi is Brazil’s largest fixed telephony operator, but several of its assets are up for sale as part of its judicial recovery process approved by its creditors. The distribution of its customers and mobile and fixed telephony operations will be distributed among the three companies that jointly won the auction.

The operation, however, is subject to final endorsement by Anatel, the telecommunications regulatory agency, and the Administrative Council for Economic Defense (CADE), the antitrust agency.

“We are providing all the necessary information for the complete analysis of the operation, which is a very well thought-out operation, considering all the limitations we may have in terms of spectrum and customer distribution,” said Gebara.

For the executive, the operation is “easily understood and will be easily approved”. Although it is “classified as a complex operation, it was thought in terms of balance and better competitive response for spectrum distribution. But that requires some time for everything to be concluded,” he added.

For this incorporation, Gebara emphasized, “financing is supported by an extreme cash situation”. “We have R$6.6 billion (about US$1.275 billion) of liquid cash, and that allows us to make a response to this operation, which is R$5.5 billion (about US$ 1.062 billion),” he said.

“It is a comfortable situation. But we will also look at other alternatives for this type of operation,” he added.

RENEWABLE ENERGY AND 5G

On the other hand, the executive indicated that this year the biogas plant in the city of Caruarú, in the northeastern state of Pernambuco, should be fully operational to supply 1,100 units used by the company with renewable energy.

The goal is for 30,000 of the company’s operational units to be supplied by 70 solar, biogas, or other alternative energy plants.

Gebara was also confident that the Federal Audit Court (TCU) will approve in August the conditions of the auction for the operation of the fifth-generation internet (5G) and that the bidding for the concession will take place this year.

“We are attentive and will participate with certainty and responding as much as possible to the coverage demands,” he pointed out.

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