The technical department of Brazil’s antitrust regulator Cade has recommended approval, without caveats, of a network-sharing agreement for 3G antennas agreed between Telefônica Brasil and América Móvil’s Claro.

Filed last year by Brazil’s two market-leading telcos, the decision still needs to be rubber-stamped by Cade’s board.

According to the telcos, the agreement allows the shared use of more than 80 of Telefônica Brasil's radio base stations (antennas) and spectrum capacity by Claro.

Most of these assets are located in small towns and on highways, which is why Cade’s technical department did not see any major objection to the deal based on concentration issues.

With the agreement, both Telefónica and América Móvil hope to obtain efficiency gains in capex and opex.

In addition to Claro, Telefónica also has a similar agreement with TIM, but focusing mostly on 4G and 2G networks. This deal was approved by Cade without restrictions in April 2020.

In the latest quarterly earnings call with investors, Telefônica Brasil CEO Christian Gebara said that TIM now has an additional 348 sites with 4G coverage “and the ongoing pilots aimed at consolidating our mobile network in cities with less than 30,000 inhabitants are progressing very well.” 

Gebara also said that the agreement with TIM could lead to Telefônica Brasil switching off its own 2G networks in 2021. “Tests are advancing as expected and we intend to roll out [the switch-off] by the third quarter this year.”

Meanwhile, TIM’s Other Revenues line, which comprise mostly the network-sharing and swap agreements, grew by 10.2% year-on-year in 1Q21, “in line with the company's strategy to expand the fiber optic transport infrastructure (backbone and backhaul) with higher efficiency in asset allocation (Capex and Opex),” TIM said in its Q1 financial report.

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