Telecom Italia strengthens Brazilian footprint

Telecom Italia strengthens Brazilian footprint

Telecom Italia’s Brazilian company, TIM Participações S.A. (TIM Brasil), has signed an agreement to buy AES Atimus Group for €700 million.

TIM Brasil completed the acquisition through its seperate subsidiary TIM Cellular S.A. to acquire full ownership of the Brazilian infrastructure company. AES Atimus owns a 5,500km fibre-optic network covering 21 towns in the São Paulo and Rio de Janeiro region.

According to the Financial Times, this acquisition is the biggest undertaken by Telecom Italia in almost 10 years, and it will save the telco approximately €449.87 million in capex and opex over three years.

Telecom Italia said that AES Atimus recorded 211 million reais (€95 million) in revenues in 2010, which should reinforce TIM Brasil’s competitive position in the country. The additional fibre will also increase the telco’s capacity for mobile backhaul.

This acquisition builds on Telecom Italia’s buyout of long distance, Brazilian operator, Intelig, in 2009 expanding the network’s reach in an increasingly competitive market.

According to a report from BuddeComm, Brazil has the fifth largest mobile market in the world with penetration rates surpassing 100% which is only expected to increase. The new addition to TIM Brasil will support the demand on the business for mobile broadband as well as potential 4G/LTE licences that the Brazilian government has said it will allocate before the Brazilian World Cup in 2014.

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