01/12/2009


What will happen after the incorporation of BrT by Oi?

 

In January 2009, Oi got control of Brasil Telecom (BrT). The incorporation happened about eight months after the trade announcement, in April 25th 2008 (more details).

 

By the incorporation of BrT, Oi reached the second position in gross revenue among the groups that operate in the Brazilian telecommunication service market, being very close to Telefonica/Vivo group (more details).

 

Note: R$ 111 billion, accumulated in the first nine months of the year.

 

 

Oi and BrT are the local fixed telephony concessionaries in the regions I and II of Brazil. By this acquisition, Oi consolidated itself as the main fixed telephony operator in the country, and consequently as broadband provider.

 

 

 

 

As Oi and BrT operate in different geographic regions there are no expectations for big changes in their action towards the markets where they are already leaders (wireline telephony and broadband).

 

In the cellular market, where Oi is in the 4 th position in market share even after incorporating BrT, the same might not happen.

 

 

 

 

Besides BrT, Oi also acquired licenses to operate in the State of São Paulo, reaching operation in all the country, like Vivo, Claro and Tim.

 

Oi aggressively broke into the market in São Paulo, reaching in less than two months a market share of 4.6%. The company might also have a more aggressive behavior in BrT's region, as it has being doing in the region where is already the leader in cellular market share.

 

This more aggressive posture might be extended to other areas where the company operates, such as Pay TV, in which Oi's presence was very small. Oi wants to conquer 8 million DTH subscribers in five years. Oi and BrT's internet providers won't be affected by the changes by the moment, for CADE willing.

 

Oi also announced plans for international operation, expanding for Latin America and Africa. That won't be an easy task, since all the operators in these regions were already acquired by big international groups.

 

You could ask:

  • Will Oi/BrT be the Telecom leader in Brazil?
  • Will Oi/BrT expand to the international market?
  • How can 3G and number portability affect this climate?
  • What will be the evolution in the operators consolidation process in Brazil?

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