Telecom Italia, Oi want new Brazil telecom rules before any merger

Luciana Bruno – Reuters, 10/27/2015

Telecom Italia SpA and Oi SA on Tuesday urged Brazil’s government to revamp telecommunications industry rules before the companies would consider a merger, a sign that consolidation hinges on a more flexible regulation of carriers.

The easing of mandatory investments in fixed-line telephony and other rules would determine whether wireless carrier TIM Participações SA considers a merger in Brazil, Marco Patuano, the chief executive of controlling shareholder Telecom Italia said at a São Paulo event.

Oi CEO Bayard Gontijo said at the same event that those requirements demand too much of companies operating fixed-line licenses, and must be updated so they can invest more. Oi has for years spent heavily to cope with mandatory fixed-line expansion goals, hampering its ability to compete in the mobile and data segments.

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