Regulator tells Telefónica to loosen grip on Brazil

The Brazilian antitrust regulator has told Telefónica to either reduce its ownership of rival Telecom Italia or sell a stake in its local business to reduce the Spanish group’s control over the country’s mobile telecoms market.

Cade, the competition watchdog, said that it had “identified potential risk to competition” since Telefónica bought a larger stake in Telecom Italia’s dominant shareholder this year. Telefónica’s Vivo competes in the Brazilian mobile market with Telecom Italia’s TIM Brasil. The two groups control more than half of the country’s mobile market. “As a result of the transaction, a company that already has a minority stake in TIM would control Vivo,” Cade said. The regulator recommended that Telefónica should either remove its indirect stake in TIM Brasil or sell a controlling stake to a new shareholder in Vivo.