The purchase of the mobile telephony assets of the Oi group by the operators Tim, Claro and Telefônica Brasil, which owns the Vivo brand, was authorized, with restrictions, by the Administrative Council for Economic Defense (Cade). The approval was conditioned to the fulfillment of measures that reduce the competition risks and that will be contained in an Agreement on Control of Concentrations (ACC). Oi sold the mobile network in 2020 to pay off debts. The transaction needed confirmation by the antitrust agency.
The decision was taken at a meeting this afternoon (9). The analysis of the operation showed that Oi’s departure from the Personal Mobile Service (SMP) market would reduce the number of operators operating in the segment from four to three, leading to a concentration in the offer of the service. Cade’s understanding, however, is that the bankruptcy of Oi in this market could deepen the concentration of the sector, even greater than that resulting from the transaction, given that the market leaders would absorb the bankrupt company’s current customers.
“When considered together with Anatel’s constraints and sectoral regulation, Cade’s remedies have the potential to significantly reduce barriers to entry and increase the expansion of competitors, mitigating the competition concerns identified during the instruction of the present process” , evaluated, according to a note from Cade, counselor Lenisa Prado.
The chairman of the board, Alexandre Cordeiro, and the counselor Luiz Hoffmann followed Lenisa Prado’s vote. Councilors Luis Braido, rapporteur of the merger; Paula Azevedo; and Sérgio Ravagnani voted to disapprove of the operation. The decision was made based on the casting vote of the president, as the approval did not reach a majority of votes.
The ACC provides for measures that “favor and facilitate the entry of new economic agents and the expansion of competitors in the SMP market”. Among them is the public offer to be made by the purchasers of about half of the base radio stations (EBRs) that were acquired from Oi. The lease of part of the spectrum from Oi is also planned, among other measures.
