Anatel Likely To Approve Further Consolidation
América Móvil is reportedly interested in strengthening the struct ure of its Brazilian operations by merging them into a single operation. Embratel , Claro and Net Servi ç os will conduct internal analyses and will be in contact with the regulatory authority, Anatel, to assess the feasibility of a merger and the conditions it would operate under. Due to historical precedent, BMI does not see any major issues with the transaction except in the pay-TV sector, and we do see advantages for the unified company once a merger is completed.
América Móvil's presence in Brazil extends across the mobile (Claro), fixed-line voice (Embratel), broadband (Net Serviç os and Embratel) and pay-TV sectors (Net Serviç os and Embratel). It has a sizeable presence in each market. By merging these units under one banner, the company would be able to offer improved quadruple-play bundled packages to subscribers and effectively compete with rivals Oi and Vivo , who also have a presence across the four markets. It is likely the service would be reformed under the Claro brand, as is the case in other América Móvil markets in Latin America.
Anatel approved a similar request form Telefónica in August 2011, allowing the transfer of fixed-line operating licences to Vivo . Further consolidation of Telefónica and Vivo's shares resulted in Vivo Participações becoming the single company publicly traded on the Brazilian stock exchange in April 2012. The company also has operations across all four verticals, and we therefore do not see this universal presence as a barrier to América Móvil's planned merger.
|Pay-TV Merger A Potential Stumbling Block|
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