Brazil braces for shift from four to three mobile operators

In Brazil, it was once accepted wisdom that four telecom operators was the correct number to ensure good levels of profit versus competition. But in recent weeks, events in Europe are being felt across the Atlantic as Telecom Italia prepares for a possible sale of its Brazilian asset, Tim Participações, a maneuver that could leave the Latin American market with only three major players.

This is already having repercussions among rivals with Portugal Telecom and Brazil’s Oi signing up for a merger ostensibly to prepare themselves for consolidation. Brazil is one of the world’s prized telecom markets. Subscriber numbers were more than 268 million in August, representing penetration rates of more than 1.35 lines per head of population, compared with 46 million cellular lines a decade ago, according to Anatel, the industry regulator. By 2018, Brazilian cellphone users are expected to increase to 350 million, a report by Ericsson predicted.