Telefónica's Cesar Alierta prepares to challenge Carlos Slims' plans for Brazil
Spain’s Telefónica announced today the successful takeover of leading Brazilian mobile operator Vivo after weeks of strained negotiations with its joint-owner Portugal Telecom (PT). The move will allow Telefónica to merge its fixed landline services with Vivo’s national mobile network and begin offering Brazilian consumers ‘triple-play’ and ‘quadruple-play’ service packages (i.e. fixed-phone, internet, television, and mobile telephony).
Negotiations were revived after the European Court of Justice ruled that the Portuguese state’s veto of the transaction, permitted under their ‘golden share’ rights, was illegal. Telefónica closed the deal after raising its original offer to PT’s stakeholders by a third and agreeing on the final selling price of 7.5 billion euros ($9.8 billion USD). Although the new price totals more than the entire 7.4 billion euro ($9.61 billion USD) value of Portugal Telecom itself, the Brazilian market’s future growth prospects are estimated to have made the deal worth the colossal short-term cost.
Telefónica is now primed to compete with market leader América Móvil – owned by Mexican telecommunications billionaire Carlos Slim – in offering packaged internet, telephony and television services to Brazil’s fast-growing consumer market. Telefónica’s announcements come as Mr. Slim prepares to conclude his plans to merge his wireless and fixed-line interests in Brazil (Claro mobile and fixed-line owner Embratel) and be the first company to offer Brazilian consumers the combined communications and entertainment services already enjoyed in neighboring countries. The consolidation of Mr. Slim’s telecom interests in Brazil are expected to add an additional 50 million customers to Claro and Embratel’s parent company América Móvil and cement Mr. Slim’s hegemony in the Brazilian and Latin American telecommunications market.
Following today’s announcement Telefonica’s shares rose by nearly .4% to $66.38, while América Móvil’s shares dropped slightly by .08% to $51.01 (as of 10:48 ET).
A few months ago, I wrote about the early stages of the conflict in Ukraine through the lens of Sun Tzu’s The Art of War. While it appears likely that the war will carry on into the foreseeable future, enough time has passed for us to make an honest assessment of each side’s relative […]
The Ukrainian Army has made dramatic strides in the last few weeks. Ukraine’s tactical commanders have outfoxed their Russian counterparts, and by issuing a feint towards the south the UA has been able to earn substantial gains in the north of their country. The impact of these efforts have been compounded by the steady stream […]
In mid-May the Irish political party, Sinn Féin, won the plurality of seats in the Northern Ireland Assembly. Many American readers might not fully understand the significance of Sinn Féin’s political victory- but rest assured that subjects of the United Kingdom and a wide range of political movements the world over have heard the message […]
The first wave of the Russian offensive in Ukraine has fallen short of Russian autocrat Vladmir Putin’s ambitions. Most analysts deduced that Putin had hoped to achieve a decapitation strike of the Ukrainian government- taking Kiev and replacing Ukrainian President Vladimir Zolinski with a pro-Kremlin voice. Kiev has been threatened repeatedly through the course of […]
On the weekend of March 26th, the notorious MS-13 gang went on a massive killing spree in El Salvador which left more than 70 people dead by Sunday. Even for a country where powerful gangs hold massive sway, this recent tragedy stands out considering that it was the bloodiest day on record since the civil […]
