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On Monday afternoon (14) the sale of Oi’s mobile phone business to the consortium formed by rivals Vivo, TIM and Claro was made official. The trio’s offer of R $ 16.5 billion was the largest received by the company. Oi has also sold its towers and data center business and should completely disappear from the mobile phone market.
Oi was the last major Brazilian operator to have a significant share in the national mobile telephony market. Its customer base will be shared among rivals, but TIM will be by far the biggest beneficiary of the business.
Sliced
The Italian operator, which today has 23% of active clients in national mobile telephony, will jump to 32% with the incorporation of the Oi base and the Mexican Claro, which now has 26%, will have 29%. The Spanish company Vivo continues to be the leader even with the incorporation of Oi, going from 33% to 37% of the market.
To decrease the chances that CADE will hamper the business (Administrative Council for Economic Defense), the consortium of operators decided to separate from the Oi base respecting the criterion of regional dominance. This means that the operator with the lowest stake in a given DDD area must absorb Oi’s entire customer base in that region.
Map with the main operators in each of the Brazilian DDDs in 2020.Source: value
Northeast factor
TIM should benefit from this system because the company was already strong in regions where Oi had low participation, such as the south and southeast. However, Italian’s share is currently low in the Northeast, but Oi leads in most states in that region. Therefore, TIM should move from being the “least preferred” in the Northeast to being the market leader in various DDDs unless there is a movement of massive portability requests.
As Oi has already sold its towers to another company in a different auction for R $ 1.4 billion, it is possible that rivals end up absorbing the clients of the Brazilian company into its existing infrastructure or even contract the services of the heir to the Oi towers to deliver your signal.
