Tuesday, September 16, 2014

And if Telecom Italia to buy Hi? – Business Journal – Portugal

And if Telecom Italia to buy Hi? – Business Journal – Portugal

The Italian operator may proceed with an offer to acquire Hi. Happening, may benefit the shareholders of Portugal Telecom, believe markets.

The Hi was “eye” on the acquisition of Telecom Italia Mobile (TIM), an operation that could deliver in partnership with counterparts, particularly with America movile, millionaire Carlos Slim.

Now, with the news that realizes that Telecom Italia is keen to make a bid on Hi, market consolidation may change. For now, investors seem content of Portugal Telecom, observing how the PT shares valued so the news came out at Il Sole 24 Ore and Bloomberg.

The union of Hi with TIM gives Brazilian operator, which is about to complete its merger with Portugal Telecom, a dimension in mobile, which has hitherto not achieved. The Hi has consolidated its position in the fixed

In the mobile market there are three major operators -. Vivo, TIM and Claro – vying

the millions of customers in Brazil. The operator Telefónica (Vivo) is the leader, with a share of 28.78%, followed by TIM with 26.91% and Claro with 24.95%. Behind comes the Hi, which guarantees 18.53% of the more than 275 million mobile users market.

The union of TIM and Hi alter the setting of the market and push Vivo for second place. The Brazilian subsidiary of Telecom Italia, at the end of the first half, had 74.2 million mobile lines, corresponding to a market share of 26.9%.

In the pay-TV segment, the market is much more concentrated. There are two “players” who fall away. The course stands out in this business, with a share of 53.28%. In second place is the Sky / DirectTV, owned by AT & T, with a much lower share, getting 29.61%. Operators such as Hi, I live and stay with GVT shares between 4.67% and 3.63%.

Telefónica has a share of only 3.63% in pay television, but it is a position that will be changed after the company had secured the acquisition of the Brazilian company GVT with a share of 4.21%. However, despite this reinforcement, the company still far from second place held by Direct TV.

Telefónica has shown that liquidity continues to go shopping. The Spanish operator, which also has a stake in Telecom Italia, which in turn owns TIM, has admitted he would be interested in acquiring the latter.

Hi showed that wanted to be part of this consolidation movement. The operator, although make sure he was not in negotiations, admitted that it could submit a joint bid of € 10 billion for Brazilian operator Telecom Italia. For this, the company needed only that the shareholders of Portugal Telecom gave green light to the new terms of the agreement with Hi, a situation that has already happened.

If the acquisition strategy materializes, that Tim might then be divided into 40% for the course, 35% to 25% and Hi to Vivo.

With a possible takeover bid (OPA) of Telecom Italia on Hi, the sale of TIM may be without effect, since Telecom Italia join the two companies with operations in Brazil and Claro and Vivo should stay out of business.

Bloomberg reported that Telecom Italia may be required for 13 000 million euros for its 67% stake in Tim.

The Telecom Italia was with EUR 7000 million in the portfolio since the failed takeover of GVT. This was the amount that the Italian company has been prepared to pay for cable TV company. However, Vivendi, owner of GVT, chose the proposal of Spain’s Telefonica, which paid more than € 450 million.

While the market is red hot with the consolidation in the telecommunications sector in Brazil, the term for submission of proposals for the auction to the frequency of 700 Mhz 4G is tightening up. Operators have until September 23 to submit proposals, but have some associations came to contest the same, with the possibility of a challenge.

TIM origin dates back to the late 90s, when, in 1998, the Brazilian government transferred to the Tele Celular Sul Participações ownership of several companies such as Mobile Telepar. It is in 1999 that Telecom Italia takes control of the operator and starts as its investment plan. A significant step was taken in early 2001 when the TIM acquires licenses in bands D and E mobile, becoming the only authorized group to ROVIDE mobile services across the country.

No today is that TIM is an active participant in the consolidation of the Brazilian telecommunications market. In 2009, the company joined forces with Intelig. And two years later it was time to acquire AES Eletropaulo Telecommunications and Communications.

The company anticipates that the development of infrastructure of 3G and 4G, in the period between 2014 and 2016 corresponds to a investment of 11 billion dollars.

The Portugal Telecom which got 39% of the Hi may also gain from all this appreciation. If present, the Hi is valued at € 4.3 billion, Telecom Italia may have to pull the purse strings and overcome this appreciation.

Hi arose by joining Telemar with Brazil Telecom, which would, under Lula da Silva, the Brazilian Supertele. The same law had to be changed so that the Hi could take the form of today.

When in 1998 the Telebras was divided, Tele Norte Leste became the largest, integrated operators in several states, these operations which were integrated in 2001,

allowing the creation of Hi in 2001 In 2011, he signed the contract that formalizes the industrial alliance with PT, which led in 2013 to the proposed merger, in which the operation Portuguese PT was built in Hi.

As for investments, the company has planned an expenditure of 24 billion reais in the period 2012-2014.

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