Brazilian mergers & acquisitions help propel converged networks

eBook: Latin America's Next Generation Networks(Editor's Note: This article is part of FierceTelecom's latest eBook Latin America's Next Generation Networks. Download a copy of the eBook by clicking this link where you can read this article and others on the burgeoning Latin American Telecom market.)

by Tony Danby, special to FierceTelecom

Latin America's largest country, Brazil, has seen a wave of mergers and acquisitions as the main telecom companies jostle to compete for existing and new customers. As a result, heavyweight telecom operators--especially with fixed and mobile operations--see NGN as an opportunity to offer a common platform to deliver additional services, tap synergies and target burgeoning new markets.

Mergers include Oi and Brasil Telecom, which established a national champion to fend off regional players such as Telefónica and América Móvil. Oi's wireless operation has also recently stormed into the São Paulo market to woo new subscribers.

The company also controls local company Way TV Belo Horizonte S.A. Other players have also been snapping up smaller rivals.

Spain's Telefónica has acquired pay-television company TVA and jointly owns Brazil's No.1 mobile phone company, Vivo. Likewise, Mexico's América Móvil, owned by Carlos Slim, controls cable TV company NET Serviços de Comunicação, long distance carrier Embratel and mobile phone company Claro.

France's Vivendi, which owns Universal Media, last year bought Curitiba-based wireline provider GVT. The French company fended off a counter bid by Telefónica to make its first step into Latin America.

Eduardo Tude, president of local telecom consultancy Teleco, said that consolidation will help to spearhead developments in NGN in Brazil. A separate fixed and mobile network is expensive, so it makes economic sense to merge the two into a single network.

Sizing up Latin American telecom M&A
Acquirer Acquiree Focus Deal Cost
Oi Brasil Telecom Wireless/Wireline $3.5 billion
Telefónica TVA Pay TV No details disclosed
Vivendi GVT Wireline Services $549.4 million
América Móvil Telmex Wireline Services $21 billion
Brazilian mergers & acquisitions help propel converged networks