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Brazil Government May Allow Nextel To Buy Mobile Company - Reports

Date : 11/12/2012 @ 7:05PM
Source : Dow Jones News

Brazil Government May Allow Nextel To Buy Mobile Company - Reports

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SAO PAULO--Brazil's government is considering whether to authorize the sale of a small mobile phone company that's hit hard times to Nextel, the local unit of NII Holdings Inc. (NIHD), as a way to increase competition in the mobile phone industry, according to newspaper reports over the weekend and on Monday.

The telecommunications regulator, Anatel, is studying whether it can hand over Unicel, which faces financial difficulties, to Nextel, according to the Folha de S. Paulo newspaper.

The four major mobile phone companies in Brazil cannot bid for Unicel as they already own the maximum 80 Mhz of spectrum permitted by law, according to Folha. Nextel owns just 20 MHz, it says.

The four other major operators, Telefonica Brasil SA (VIV, VIVT4.BR), TIM Participacoes SA (TIMP3.BR), Oi SA (OIBR, OIBR4.BR) and Claro, a unit of Mexico's America Movil SA (AMOV, AMX, AMX.MX), are considering legal challenges should Anatel approve the sale to Nextel, according to the report.

The case has another layer of political complexity, with indirect ties to President Dilma Rousseff. According to Folha, Unicel is owned by Jose Roberto Melo da Silva, a friend of Jose Roberto Camargo Campos, the husband of Rousseff's former chief of staff, Erenice Guerra. Guerra left office amid accusations that she'd used influence to help certain companies, including Unicel.

Write to Matthew Cowley at matthew.cowley@dowjones.com

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