SAO PAULO, June 2 The Brazilian broadband unit
of France's Vivendi SA, GVT, on Monday decried the idea
of breaking up rival TIM Brasil, urging regulators to kill a
potential plan that would be "bad news to the consumer."
Speculation about a possible consolidation in Brazil's
telecom market has circulated since last year, but GVT's
statement was the first outright opposition from a rival of TIM
Brasil, the local unit of Telecom Italia SPA.
"The idea of splitting TIM and selling the three pieces to
the three other major mobile operators in the market is
unthinkable in the current scenario," wrote GVT. "It will lead
to price increases, a decrease in quality of service and lower
investments in a sector that already lags compared to
GVT said it would work with regulators to make sure the
government does not allow a breakup of TIM Brasil, the country's
second-largest wireless operator, which has nearly 74 million
mobile subscribers and over 75,000 fixed broadband clients
Telecom Italia CEO Marco Patuano has repeatedly said TIM
Brasil, listed as TIM Participacoes SA, is not up for
sale and that Telecom Italia would consider selling it only if a
high priced offer was made for the company. Patuano has also
said a merger of TIM Brasil and GVT would bring together two
good assets and create synergies but has dismissed speculation
they are in merger talks.
Telecom Italia investors are divided over the Italian
group's future strategy in Brazil. Sources close to Telefonica
SA, a key shareholder in Telecom Italia, have said the
Spanish group aims to break up TIM Brasil and share its assets
among rivals, including Telefonica Brasil. Telefonica
has repeatedly denied such plans.
Italian businessman Marco Fossati, who owns 5 percent of
Telecom Italia, has spoken against such a prospect and proposed
combining TIM Brasil with broadband operator GVT.
(Reporting by Brad Haynes; Additional reporting by Danilo
Masoni in Milan; Editing by Diane Craft)