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US operator set to launch wireless services in Brazil

US telecommunications colossus AT&T is reportedly mulling over a move to launch wireless services in Brazil.

A source close to the American operator has suggested it is now set to make a foray into the already saturated Brazilian mobile market using 700MHz spectrum which is set to be auctioned by the country’s telecommunications regulatory authority ANATEL later this year.

AT&T already has a significant market presence in Latin America. It has mobile operations in Mexico and a series of enterprise businesses across the continent and pay-tv units in countries such as Argentina, Chile, Colombia and Uruguay.

The US operator has a majority stake in Sky Brazil which provides the firm with access to a significantly large potential customer base. However, analysts have suggested that despite the resources at its disposal it will still face strong competition as a new entrant to the already hyper-competitive Brazilian mobile industry where its four rivals have already established huge user bases.

GSMA Intelligence figures which include cellular and Machine to Machine indicate that Telefonica’s Vivo is the telecommunications incumbent with 75m connections. Vivo is then followed by Claro and Telecom Italia-owned TIM Brazil who each have 60m connections respectively. The fourth operator in Brazil is Oi, but that has encountered a number of challenges in recent years and lost 3m connections last year and has a total of 39m overall.

Reports emerging in Brazil have claimed that instead of acquiring a stake in an existing provider, AT&T will enter the mobile market by purchasing blocks of spectrum unsold by regulator ANATEL in the country’s previous spectrum auctions. The 700MHz blocks are set to be auctioned off for 4G purposes in the second half of 2018.

However, this isn’t the first time that the US operator has been linked with expansion plans in Brazil, reports suggested it was in talks with Oi in both 2015 and 2016 but negotiations stalled as the Brazilian operator struggled to restructure its debt pile, but it is now looking increasingly likely that AT&T will now move into the Brazilian market.