Perspectives from ISB

América Móvil is a Mexican telecommunications corporation that is the fourth largest mobile network operator in terms of equity subscribers and one of the largest corporations in the world. América Telecom, the holding company for América Móvil, was incorporated in 2000 by Carlos Slim. It subsequently bought stakes in cellular companies across Latin America and Europe. However, recently the company has been bruised by antitrust laws in Mexico as well as in foreign markets.

 Notwithstanding these pressures, now in a recent development the company has reportedly shown interest in acquiring some or all of the operations run by its struggling Brazilian rival Oi SA. As per América Móvil CEO, Daniel Hajj, América Móvil is interested in acquisition of Oi, whether or not the company is split up during court proceedings. However, due to its scale, the company would likely face tough antitrust hurdles for an outright takeover.

 Oi, formerly known as Telemar, is the largest telecommunications company in Brazil and South America, both in terms of subscribers and revenues. The company originated during the privatization of the telecommunication sector in Brazil. Brazil’s telecommunication market is struggling: four of its largest operators are battling to maintain profits amid recession while investing large sums in new technology and infrastructure. On June 20, 2016, Oi filed for a US$19 billion bankruptcy protection, the largest on record for Brazil.

 Source: CampdenFB