GVT vociferously opposed to TIM Brasil breakup plan

4 Jun 2014

Global Village Telecom (GVT), the Brazilian broadband provider owned by French group Vivendi, has said it will work with the government and local regulators to stop competitors from breaking up and selling off the country’s second largest carrier TIM Participacoes (TIM Brasil). Bloomberg reports that GVT has joined the ranks of those opposed to a plan being proposed by rivals Telefonica (Vivo) and Oi SA, noting that in its opinion the move: ‘would be a total disservice to society and would do irreparable and unacceptable harm to the Brazilian market.’

Earlier this week, CommsUpdate reported that Telecom Italia (TI) and its single largest shareholder, Telefonica of Spain, have locked horns over how to proceed with the Italian group’s Brazilian business TIM Brasil. Whilst TI’s chief executive officer Marco Patuano favours a plan to retain TIM Brasil and then expand its reach through a merger with Vivendi’s Brazilian unit GVT, Telefonica (which owns the Vivo brand) and Oi SA (Brazil’s fourth largest wireless carrier) instead prefer a plan to break up TIM Brasil as early as this year. As recently as April this year Telefonica and Oi SA discussed a plan to break up TIM Brasil and divide its assets among Oi, Vivo and Claro – the local unit of America Movil (AM). One scenario under consideration would involve the use of a financial vehicle, dubbed Comissario Mercantil, to acquire TIM Brasil and then split the business among the other operators, the sources said. TIM Brasil has a market value of USD13 billion and Milan-based TI owns 67% of the company. GVT has not participated in the talks involving Rio de Janeiro-based TIM over a merger or any other type of corporate restructuring, according to a statement published by the firm.

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