Spanish operator Telefonica Moviles may be forced to increase its investment in its Brazilian mobile phone joint venture with Portugal Telecom. The action may be require following Portugal Telecom’s decision to increase its stake in a Brazilian operator.
Portugal Telecom has purchased $334 million of new shares in Telesp Celular Participacoes, Brazil’s largest mobile company. However, Telefonica and Portugal Telecom have already agreed to pool their Brazilian assets to form a joint venture, with each taking 50% of the venture. Portugal Telecom’s increased investment in Brazil may force Telefonica to increase its contribution, to achieve the balance.
The joint venture was agreed in January 2001 and is due to start next month. The combined company will have 12.4 million customers; it hopes to reduce costs and increase competitiveness.