América Móvil cleared a key hurdle in moving ahead with its plan to merge its three Brazil-based service providers--Claro, NET Servicos and Embratel--into a single company as Brazil regulator Anatel approved the plan.
Anatel's approval isn't without strings. The regulator said that mobile operator Claro, which will absorb NET and Embratel, will have to list its shares on the local stock exchange.
Igor Villas Boas, an Anatel official, said that Claro will have to open up to other investors under Brazilian telecom regulations that stipulate that concession holders or their controlling companies must have an open capital structure.
Embratel provides traditional wireline POTS service through a public concession, and according to local regulatory rules, wireline service providers have to be publicly traded companies.
In the second quarter, Brazil was a key contributor to América Móvil's total subscriber growth. During the quarter, the service provider's Brazil subscriber base rose 12.2 percent to 34.5 million fixed units at the end of June. Brazil makes up 48 percent of its wireline revenue generating units (RGUs), with pay TV and broadband accesses rising 14 percent and fixed-voice accesses growing 8.2 percent. One of the unique elements of the Brazil market is that 68.1 percent of the new customers are taking triple-play bundles.
The consolidation of these assets follows an earlier proposal to sell some of its assets in Mexico in order to "reduce its national market share in the Mexican telecommunications market under 50 percent."
Mexico hopes to attract about $19 billion to $232 billion in investments from new telecom firms entering the market, of which about $10 billion will be used to provide service through a publicly owned telecom network the government will begin leasing this year.
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