Oi Móvel is sold to Claro, TIM and Vivo for R $ 16.5 billion | Telecommunications

The trio of operators Claro, TIM and Vivo just finished off the Oi Mobile for R $ 16.5 billion. The auction took place on Monday (14) at the Court of Justice of Rio de Janeiro for the sale of the Isolated Productive Unit of Mobile Assets. With the deal, Brazil now has only three major mobile phone operators.

Oi Store (Image: Disclosure / Oi)

The conclusion of the sale should still take a long time, since the business needs to follow the bureaucratic procedures for approval by Anatel and the Administrative Council for Economic Defense (Cade). Oi expects this to happen only at the end of 2021.

The sale of Oi Móvel has been foreseen since the disclosure of the strategic plan, in June 2020. The company has priced the UPI of Mobile Assets at least R $ 15 billion. It was not long before the emergence of binding proposals, including Claro, TIM and Vivo; shortly afterwards, Oi accepted the Highline as a stalking horse, a position that allows interested parties to cover possible offers.

At the end of the day, the Highline proposal won, but for a short time: Of course, TIM and Vivo presented another binding proposal with a higher value, which is still valid today. This increased Oi Móvel’s price to at least R $ 16.5 billion.

Oi’s future without mobile telephony

From the consumer’s point of view, the loss of a cell phone operator means greater concentration in the sector and, consequently, less competition.

On the other hand, the sale of the mobile arm was the solution found by Oi to survive: the operator faces a long process of judicial recovery with debts that reached R $ 64 billion; most of this amount was negotiated, and net debt reached R $ 21.2 billion in the third quarter of 2020.

With the sale of Oi Móvel, the company expects to end the judicial reorganization process and focus on the expansion plan for fiber optics for residential broadband. Oi also sold towers, datacenters and will auction the pay TV unit next year, in addition to seeking a partner for the neutral infrastructure company InfraCo.

Oi Móvel has 36.5 million customers

According to Anatel, Oi has 36.5 million cell lines. This means that the operator has 15.9% of the Brazilian mobile market, behind TIM (22.3%), Claro (26.6%) and Vivo (33.6%).

Oi provides cellular telephony services in 3,611 Brazilian municipalities, but has not been able to evolve the mobile network with the rise of generations. The company is present with 2G technology in 3,499 municipalities; with 3G, there are 1,655 cities; 4G is only available in 1,035 locations.

For comparison, Claro is present with 4G technology in 2,864 cities, followed by Vivo with 3,519 cities. TIM is the technology coverage leader and serves 3,732 locations.

Who will be with Oi Móvel’s customers?

Details on the distribution of assets have not yet been released at the auction. The market expectation is that customers will be distributed among each buyer, to maintain a kind of “balance” in the market and to facilitate the approval of the deal by Cade and Anatel.

Tray and nano-SIM card (Image: Darlan Helder / Tecnoblog)

Oi has 36 million mobile lines (Image: Darlan Helder / Tecnoblog)

Therefore, the division of the customer base must be done individually by DDD, privileging the operator with the lowest market share. In São Paulo (DDD 11), for example, TIM holds the 3rd place in the market share, with 22.1%; in Rio de Janeiro (DDD 21), Vivo would be responsible for absorbing 1.9 million Oi mobile lines.

A survey of the Teleco done in July 2020 points out that Oi has the largest participation in cell lines in only four DDDs: 71 (Salvador / BA), 81 (Recife / PE), 83 (João Pessoa / PB) and 85 (Fortaleza / CE). If this arrangement is actually implemented, whoever takes over the operation in these regions will leave the market leader last.

If this arrangement is considered, Oi Mobile’s customer division would look like this:

  • TIM receive customers of 37 DDDs;
  • sure receive customers of 18 DDDs;
  • Live receive customers of 12 DDDs.
DDD Operator with lower market share
11 TIM
12 Live
13 TIM
14 sure
15 TIM
16 TIM
17 TIM
18 TIM
19 TIM
21 Live
22 TIM
24 TIM
27 TIM
28 TIM
31 sure
32 TIM
33 sure
34 sure
35 sure
37 sure
38 sure
41 Live
42 Live
43 sure
44 sure
45 sure
46 sure
47 sure
48 sure
49 sure
51 TIM
53 TIM
54 TIM
55 TIM
61 TIM
62 TIM
63 TIM
64 TIM
65 TIM
66 TIM
67 TIM
68 TIM
69 TIM
71 sure
73 TIM
74 TIM
75 TIM
77 sure
79 sure
81 Live
82 Live
83 Live
84 Live
85 Live
86 Live
87 sure
88 Live
89 TIM
91 Live
92 TIM
93 TIM
94 TIM
95 TIM
96 TIM
97 TIM
98 TIM
99 TIM

With information: InfoMoney. Developing history. The market data contained in the post refer to the month of October 2020.

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