Sale of Oi Móvel is approved by Cade’s technicians, but with these conditions – Telecommunications – Tecnoblog

A Hi Mobile was bought by Of course, TIM and Vivo in December 2020, but for the deal to be concluded it is necessary to have approval from Anatel and the Administrative Council for Economic Defense (Cade). The technical area of ​​the antitrust agency recommended the approval of the sale, but established some conditions to mitigate possible risks.

Cade recommends medicines when buying Oi Móvel to avoid risks (Image: Lucas Braga / Tecnoblog)

It is important to highlight that the green light in the technical area does not mean that the sale of Oi Móvel has already been released. This is the recommendation of Cade’s General Superintendence, and the final decision is taken by the body’s board of directors. The same dynamic is repeated in Anatel’s approval rites.

Buying from Oi can increase prices or decrease quality

The technical area report recognizes that the purchase will cause market concentration. In the document, the agency clarifies that Claro, TIM and Vivo “now hold 98.35% of the national market for mobile voice and data services nationally” and that they will have “practically all (100%) of the ERBs [antenas de telefonia móvel] both nationally and by area code”.

In addition to the concentration of the market and antennas, Cade also highlights that something similar happens with radio frequency licenses. With the deal approved, the trio of operators will have 98% of all available capacity between 1 GHz and 3 GHz, in addition to 95% in bands lower than 1 GHz — this last accumulation is something that already happens today, a since Oi Móvel barely has low frequencies.

In the competitive analysis, Cade also states that slicing Oi Móvel reduces incentives for competition:

“(…) such analysis indicated that the characteristics of the relevant markets involved in the transaction favor the obtaining of an explicit or tacit agreement, in addition to allowing the detection of deviations from this agreement and the punishment of any deviations.

This agreement, anti-competitive and harmful to the consumer, may result in the adoption of a price increase or a reduction in the quantities offered, reducing the quality or variety of the products, or, still, reducing the pace of innovations in relation to the levels that would prevail under conditions of fierce competition, for a reasonable period of time, with the objective of increasing profits at the expense of consumers.”

CADE General Superintendence

One of the aspects that buyers defend is that the purchase of Oi Móvel will allow them to deliver better quality services. They point out that customers of tele access to more modern networks, and that the synergy will allow an increase in the efficiency of spectrum use.

However, that didn’t convince Cade. The opinion points out that the estimates prepared by TIM and Vivo “were based on internal assumptions, which were not informed”, and that “the improvement in the service of Oi’s current customers, in particular with the most modern technologies, will depend on investments additional”:

“(…) the mere service of Oi’s current customers from the mobile networks currently held by Buyers may, depending on the circumstances, compromise the quality of services for both customer bases.”

CADE General Superintendence

The remedies for buying Oi Móvel

If you’ve read the text so far, you’ve only found reasons for the antitrust to not approve the deal. However, the analysis of the technical area predicted some remedies for Claro, TIM and Vivo to slice up Oi Móvel, which include the public offering of wholesale assets. Are they:

  1. RAN Sharing offer (sharing of mobile networks)
  2. Radio frequency offer (spectrum rental)
  3. National roaming offer
  4. Reference Offer for Virtual Operators (MVNOs)
  5. Monitoring and mediation entity (trustee)

Cade’s technical area listed these remedies in order to provide wholesale products. This allows companies to contract capacity from Claro, TIM and Vivo to explore different business models, including the creation of new regional mobile operators, virtual operators (MVNOs) and neutral network companies.

It is worth remembering that Anatel technicians also recommended remedies to compensate for the possible damage caused by the slicing of Oi Móvel. Some of them are similar or identical to Cade’s opinion, including the reference offer for MVNOs and national roaming.

Collaborated: Everton Favretto

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