Chinese vendor denies report it is teaming up with telco to explore bid for troubled Brazilian operator

Huawei has become the latest company to distance itself from Brazilian telco Oi, which is reportedly lining up suitors to buy some or all of its business.

The Chinese vendor has denied any interest in acquiring Oi or any other Brazilian operator, Reuters reported this weekend. It had previously quoted local newspaper O Globo as saying Huawei was working on a joint bid for the troubled telco with China Mobile. There has been no official comment from the latter.

The news comes after the newswire last week cited a raft of unnamed sources as saying that Oi was holding takeover talks with a number of major international telecoms players. The deal centres on its mobile assets – an outcome that would free up cash to enable Oi to push on with fibre broadband rollout and avoid insolvency – but a full takeover cannot be ruled out, the report claimed.

Specifically, Reuters’ sources said Oi is in discussions with Telefonica and TIM, whose Brazilian operations are already major players in the country’s mobile market, while Telefonica’s Vivo also has a significant fixed-line presence. TIM, which has long been the subject of M&A speculation in Brazil, albeit usually as a takeover target rather than a buyer, issued a swift denial though.

In addition to listing an unnamed Chinese player as an interested party – speculation has linked both China Mobile and China Telecom with Brazil in recent years – Reuters claimed AT&T is also holding preliminary talks with the telco.

Oi is in some trouble. Its fixed and mobile subscriber bases have continued to decline in recent years, exacerbated by its bankruptcy protection filing three years ago, and its cash position is weak. Earlier this year it admitted it was looking to sell-off non-core assets, but at the time its mobile operations appeared to be still central to its business. Now it seems the investment requirements on both the fixed and mobile sides might be too much for it to handle.