International Finance

Huawei in talks with China Mobile to buy Brazil’s Oi

Spain’s Telefonica and Italy’s Telecom Italia are also potential bidders

Chinese multinational technology company Huawei Technologies and China Mobile are reportedly exploring the possibility of placing a bid for Brazilian telecom company Oi.

Recently, Brazil’s Senate passed a bill to upgrade the telecom infrastructure in the country. The bill allows Oi to sell its non-core asset worth $2 billion. Keeping the recent developments in mind, it is speculated that Huawei and China Mobile might enter the Brazilian market by acquiring Oi, which is the third-largest telecom company in Latin America.

According to Brazil’s local media, China Mobile has decided to establish itself in Brazil and placed an official request. However, there is no confirmation as of yet.

Last week, it was reported that Brazil’s Oi, which is heavily indebted, is in talks with Spain’s Telefonica and Italy’s Telecom Italia to sell its mobile network in a bid to avoid insolvency.

The Rio de Janeiro-based company, which is the largest fixed telephone operator and the fourth mobile telephone operator filed for bankruptcy protection in 2016 and announced a restructure of its debt which was around $15.7 billion back then. But over the years, the company has failed to turn around its business.

As of 2018, Oi had 35 million wireless customers, 14.7 million residential wireline, broadband, and pay TV customers, and 6.7 million business-to-business customers.

Despite having a manufacturing unit in Sao Paolo, Huawei is planning to set up another unit for $800 million in Brazil. Huawei predicts the demand for 5G equipment will increase not only in Brazil but throughout Latin America in the next couple of years.

Huawei Technologies recently revealed that the company expects its 5G technology will start contributing to its revenue as early as next year. Despite the US-China trade war, the company has secured around 50 5G contracts across the globe so far.

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