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Telecom in Brazil M&A Movements Analysis

M&A Movements

The Brazilian telecommunications market has been dynamic in terms of Mergers and Acquisitions (M&A) in 2024 and early 2025, significantly reshaping the value chain, particularly in the Network and Connectivity layers. These movements reflect ongoing strategies of consolidation, infrastructure unbundling, and expansion, driven by the push for fiber optic and 5G deployment.

One of the most impactful M&A processes has been the divestment of assets by Oi, a historical incumbent operator undergoing judicial recovery. A major part of this restructuring involved the sale of its mobile operations to a consortium formed by the three major national players: Vivo, Claro, and TIM. This transaction, approved in previous years but with integration continuing into the relevant period, fundamentally altered the competitive landscape of the mobile segment, consolidating market share among these three operators. [Context, 15, 18] Furthermore, Oi transferred a substantial portion of its fiber optic infrastructure and client base to V.tal, a newly formed neutral wholesale fiber network operator. [Context, 8, 12] This strategic move separated the infrastructure ownership from the retail service provision for a significant part of Oi's network. There is also an anticipated approval regarding V.tal's potential acquisition of Oi Fibra's retail operations, which could further integrate the retail and wholesale fiber business under V.tal or potentially lead to subsequent divestments of retail clients. Oi has also been divesting other assets, such as its stake in telecom towers, with Highline, a telecom infrastructure player, acquiring 8,000 towers from Oi in 2024.

The formation and growth of V.tal itself represents a major M&A-driven transformation in the Network layer. Created largely from Oi's fiber assets and controlled by Grupo Werthein and other investors, V.tal operates as a wholesale-only neutral fiber network provider. [Context, 8] Its strategy is centered on expanding this extensive network and offering wholesale connectivity and data center solutions to a wide range of clients, including the major operators and numerous regional ISPs. [Context, 8, 12] V.tal's significant investment and network reach underscore its growing importance in the infrastructure segment.

Consolidation among regional Internet Service Providers (ISPs) has also been a prominent M&A trend in 2024 and early 2025. Companies like Alares, backed by Grain Management, have been actively pursuing acquisitions to expand their fiber network footprint and increase their subscriber base. In 2024, Alares acquired Azza Telecom, which added a significant number of subscribers and reinforced its position, particularly in the state of São Paulo. Alares had also acquired Webby in 2023, further strengthening its presence. Another active player in M&A among regional ISPs is Brasil TecPar, which finalized the acquisition of Nova Telecom in early 2025, an deal initially announced in July 2024. Brasil TecPar also acquired Sempre Telecom in late 2024. These acquisitions are part of Brasil TecPar's ambition to grow and become one of the largest connectivity and technology companies in Brazil. Smaller regional providers, such as Alcans Telecom, are also engaging in acquisitions to expand their geographic reach and fiber networks, as seen with Alcans' acquisition of Fale Mais Telecom.

The acquisition of telecom towers by specialized tower companies is another notable M&A activity. Beyond Highline's acquisition from Oi, other players like IHS Towers and American Tower have also been involved in acquiring tower portfolios, contributing to the consolidation of passive infrastructure ownership in the market.

These M&A movements collectively highlight a period of significant restructuring and strategic positioning within the Brazilian telecom value chain, driven by the imperatives of fiber and 5G expansion and the evolution of business models towards infrastructure sharing and regional consolidation.

Table of the impact of these movements

M&A Movement Value Chain Layer(s) Primarily Impacted Impact on the Value Chain
Sale of Oi's Mobile Operations (to Vivo, Claro, TIM) Connectivity, Customers Consolidated the mobile market among three major players, potentially impacting competition levels and service offerings for mobile customers. Led to the migration of millions of subscribers to the acquiring operators' networks.
Transfer of Oi's Fiber Infrastructure to V.tal Network, Connectivity, Investment Flows Created a large-scale neutral wholesale fiber network operator (V.tal), promoting infrastructure sharing and altering how retail service providers access fiber capacity. Facilitates fiber expansion for various players. Shifted significant infrastructure assets and related investments to a dedicated wholesale entity. [Context, 8, 12]
Formation and Growth of V.tal (as a neutral wholesale operator) Network, Connectivity, Competition Established a key player in the Network layer focused on providing open, neutral fiber access. This encourages competition in the retail fixed broadband market by enabling more providers (including regional ISPs) to offer fiber services without extensive self-builds. Drives significant investment in fiber infrastructure. [Context, 8, 12]
Acquisitions by Regional ISPs (e.g., Alares acquiring Azza/Webby, Brasil TecPar acquiring Nova Telecom/Sempre Telecom, Alcans acquiring Fale Mais Telecom) Connectivity, Network, Customers, Competition Led to consolidation and increased scale among regional ISPs, strengthening their competitive position against national players in specific areas. Integrated and expanded regional fiber networks. Changed service providers for acquired customer bases. Increased competitive intensity in the fixed broadband retail market in targeted regions.
Acquisition of Telecom Towers (e.g., Highline acquiring from Oi) Network, Investment Flows Consolidated ownership of passive mobile infrastructure (towers) under specialized companies (towercos). Allows mobile operators to focus investment on active network equipment (RAN). Can potentially accelerate network deployment and densification (especially for 5G) by streamlining site access.

References

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