Telefonica looking at further acquisitions in Brazil amid buying flurry

MADRID (Reuters) - Telefonica SA is considering further acquisitions in Brazil following the launch of its FiBrasil fibre network joint venture this month, the Spanish telecoms group’s chief operating officer said on Thursday.

The logo of Spanish Telecom company Telefonica is seen at its headquarters in Madrid, Spain, May 12, 2021. REUTERS/Sergio Perez

Telefonica has been focusing heavily on its complex Latin American business, which it wants to streamline and strengthen amid a shift towards digitalisation and growing appetite for mobile data services in the region.

“In Brazil, we are looking at complementary acquisitions,” Telefonica Chief Operating Officer Angel Vila told Reuters, adding the group aimed to pass fibre to 24 million Brazilian homes by 2024.

Earlier on Thursday, Telefonica reported record second-quarter revenue, buoyed by one-off asset sales and tie-ups in Europe and solid performances in Germany and Brazil, where it launched FiBrasil as a joint venture with CDPQ to deploy fibre to the home (FTTH).

The operator expects regulatory approval within six months for its Colombian infrastructure vehicle InfraCo, a 60/40 joint venture with KKR announced earlier in July.

“In LatAm we are going for fibre, no doubt,” said Telefonica’s CFO and HispAm director, Laura Abasolo, adding that the group had installed record connections in the first half of the year and had reached almost 400 million homes.

“There’s booming demand for broadband with the pandemic.”

She said Telefonica would shortly announce another fibre infrastructure vehicle in the region but was still looking for financial partners.

Earlier on Thursday the operator also announced its Telefonica Tech unit had bought Cancom Ltd, a cloud and security provider valued at 340 million pounds ($474.81 mln), to benefit from firms digitising operations in the pandemic.

“Cancom’s growth rate so far has been 20%-25% and we don’t expect that to slow down in the future,” Vila added.

The two specialised companies within Telefonica Tech - IoT (Internet of Things) and Big Data, and Cybersecurity and Cloud - will have combined revenue of around 1 billion euros ($1.19 billion) by end-2021, representing 1%-2% of the group’s total annual earnings, Vila said.

($1 = 0.7161 pound)

Reporting by Clara-Laeila Laudette in Madrid; Editing by Matthew Lewis