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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