America Movil binds Brazil units closer with Wi-Fi offering

Reuters News
Posted: May 16, 2013 4:30 PM
America Movil binds Brazil units closer with Wi-Fi offering

RIO DE JANEIRO (Reuters) - Carlos Slim's America Movil subsidiaries in Brazil announced on Thursday a new combined broadband service, increasing their operational integration ahead of an expected corporate merger in the country.

Mobile carrier Claro, land-line provider Embratel and pay-TV operator Net will offer Wi-Fi hotspots in several major cities in Brazil for current broadband customers with no additional charge. Investments in the project total over 100 million reais ($50 million) so far, executives told journalists at an event in Rio de Janeiro.

The new offering should help shift data traffic from Claro's network as it prepares for the 2014 World Cup and other international events in the country. The shared service also offers a test case for tighter collaboration of the three units.

The companies already offer a joint telecom combo including mobile and fixed line services, a move announced in 2011 that was considered a major step toward their corporate integration.

America Movil plans to combine the three carriers into one company to save costs in Latin America's biggest telecom market. In April, the Mexican telecom group formally announced its intention to merge the three companies, but it still needs regulatory approval and internal studies to move ahead with the operation.

"We have to keep going forward with this kind of synergy in order to optimize our costs and deliver services more efficiently," Claro's Chief Executive Officer Carlos Zenteno told reporters. "This merger is a work for the medium term, but each of the companies will continue with their business focus."

Claro is Brazil's third-biggest mobile carrier, while Embratel is focused on the corporate fixed-line market and Net provides fixed telecom services to households.

"The biggest challenge for integration of companies like ours is what we are already doing today ... the integration of processes, products and networks," said Jose Felix, Net's CEO.

(By Sérgio Spagnuolo; Editing by Nick Zieminski)