Brazil: Auction brings major disappointment for wireless market

Brazil’s 4G spectrum auction was highly anticipated among market players and authorities looking to raise funds and inject competition into the industry. But the bidding that took place on Tuesday proved disappointing, say reports.

Authorities had hoped to raise more than $3.2 billion from the auction. At the end of the day, reports say just $2.4 billion was offered.

Reports say the results signal a shrinking Brazil market and trouble ahead for a market plagued by slow growth and rising infrastructure and innovation costs.

Part of the trouble, experts say, is the absence of one of the four main wireless operators from the bidding process. Oi, Brazil’s fourth-place carrier with oppressive debts of $19 billion, did not bid on the spectrum, and the company is now teetering on the brink of a takeover deal, either as the buyer or the target.

The top three players – Telefonica, TIM and America Movil – are all rumored to be eying some kind of deal with Oi. Earlier reports said America Movil is considering a partnership with Oi to acquire TIM. While no deal has been reached, experts say Brazil is long overdue for a wave of wireless consolidation.

Full content: Reuters

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