Summary
- Cade approved the expansion of the agreement between Vivo and Tim for the sharing of 2G, 3G and 4G networks, with the condition of a Merger Control Agreement (ACC) to mitigate risks to competition.
- The agreement imposes limitations on geographic scope and transparency obligations, including publishing involved municipalities and maintaining coverage and quality standards.
- The decision faced opposition from competitors, who alleged risks of market concentration and access to sensitive information.
The Administrative Council for Economic Defense (Cade) approved the expansion of the agreement between Vivo (Telefônica) and Tim for sharing mobile telephone networks, called RAN sharing. The decision, taken this Wednesday (10/22), allows for deeper cooperation between companies in 2G, 3G and 4G technologies.
The operation consists of amendments to contracts that the two operators have had since 2019. The objective of the new agreement is to expand the geographic scope of sharing, correcting technical incompatibilities in the original implementation and including new municipalities.
The analysis was strongly opposed by business associations. According to the report, Associação Neo, which was accepted by Cade as an “interested third party” in the case, argued that the expansion discourages innovation and forms a “club” that could close the market to small providers.
The Brazilian Telecommunications Infrastructure Association (Abrintel), which had its request for authorization denied due to procedural issues, followed a similar line. She warned of the “strengthening of the TIM, Telefônica and Claro trio” and stated that the agreement promotes “risk of access to competitively sensitive information due to the intrusive architecture of the agreement”.
Finally, Cade conditioned the deal on the signing of a Merger Control Agreement (ACC), which serves to mitigate risks to competition.
What were the conditions?
During the analysis, Cade’s superintendence identified that the original proposal was very comprehensive and lacked details, which could generate “competition concerns”. After negotiations led by advisor-rapporteur Diogo Thomson, the companies accepted the ACC’s conditions.
The negotiated agreement imposes two main obligations. The first is a direct reduction in the geographic scope of the operation, limiting the number of municipalities that will take part in the expansion.
Furthermore, Cade imposed a series of transparency obligations. Operators will have to:
- Publish the complete list of municipalities involved in sharing
- Ensure the maintenance of current standards of coverage and quality of service, prohibiting any deterioration
- Submit to continuous monitoring by Cade, which may request technical assistance from Anatel
In his vote, Thomson highlighted that the complexity of the operation required coordinated action with Anatel. According to him, the solution found was “proportionate and technically anchored”.
“With this arrangement, a solution is adopted […]: what is pro-competitive is approved, what is harmful is restricted and execution is conditioned on compliance with objective guarantees and solid behavioral controls”, stated Thomson.The court’s decision was unanimous.
RAN sharing is a common strategy among operators to optimize costs, but it is always closely monitored by regulatory bodies. Vivo itself already has a network sharing agreement with Claro, approved by Cade in 2021.
At the same time, the strategy is criticized by smaller operators — it is worth remembering that Tim, Vivo and Claro dominate 95% of the market in Brazil, according to Anatel. At the time of approval of the agreement between Vivo and Claro, Algar even appealed, claiming that deals of this type increase the risk of concentration of power between the giants in the sector.
Source: https://tecnoblog.net/noticias/cade-decide-vivo-e-tim-podem-expandir-acordo-sobre-rede-de-telefonia/
