Telefônica-Abril: When is a Sale Not a Sale?


Vigilante consumerdom: angry Argentines spank the Spaniards. Source: Iconoclastas.

The Estado de S. Paulo Group’s Investimentos is next up in our informal survey of Brazilian business publications we might, or might not, pay good money to read.

Already ruled out in this respect, with prejudice: the glossy weekly that prominently features a “business astrologer” and the glossy weekly with the tagline “inspiration for innovation.”

Recently, from Investimentos, there is this news item, which falls under the general heading of the “risco Abril.”

It does not really pass the smell test, either, at least in this preliminary sample, selected more or less at random.

The sale of a stake in Grupo Abril’s TVA cable TV operator to the Spanish Telefónica — recently fined €150 million or so by the European Union for anticompetitive practices — had come under political pressure. See

A Anatel (Agência Nacional de Telefonia) aprovou integralmente hoje a compra da operadora de TV por assinatura TVA pela Telefônica. O negócio já havia sido aprovado parcialmente em julho, mas a Anatel exigiu que as empresas refizessem o acordo de acionistas referente à operadora de TV a cabo do grupo que opera em São Paulo. O temor da agência reguladora era que o acordo original permitisse à Telefônica o controle da empresa de TV a cabo, o que é proibido pela legislação.

Anatel, the National Telephony Agency …

[Harsh game-show buzzer.]

Anatel is the National Telecommunications Agency.

Hire a copy editor (revisor(a)).

A competent one.

… approved in its entirety the purchase of subscription TV operator TVA by Telefônica. The deal had been partially approved in July, but Anatel demanded that the two parties rewrite the shareholder agreement. Its fear was that the original deal would grant Telefônica effective control over the cable TV company, which is prohibited by law.

This report seems to be telling me that the Spaniards can still “buy” TVA, but only if they relinquish effective control over its management, and shareholder voting rights.

You can own the car, but you cannot drive it or tell the driver where to go, or what oil to choose during the next lube job.

This is a bit like saying that when Nasdaq took a significant stake in the London Stock Exchange, it “bought” the LSE.

It was certainly thinking about acquiring control by rallying shareholders behind a merger. But it did not acquire control. It did not “buy” the LSE.

“Hoje entendemos que o novo acordo de acionistas satisfaz as exigências da Anatel”, disse o conselheiro Antonio Bedran, ao anunciar a decisão. “Entendemos que está eliminado qualquer outro tipo de controle, tanto acionário quanto societário”, afirmou o conselheiro. Agora, o processo segue para análise do Conselho Administrativo de Defesa Econômico (Cade).

“We now understand that the new shareholder agreement satisfies Anatel’s requirements,” said Anatel commissioner Antonio Bedran, announcing the decision. “We find that any other type of control has been eliminated, whether partnership control or shareholder control,” the commissioner said. Now, the deal must be analyzed by CADE, the antitrust regulator.

And a possible congressional probe to determine whether the legislation permits too many abuses, and needs to be tightened up.

The story reminds me of the deal between EL TIEMPO of Colombia and the Spanish Planeta Group:

Management insisted that the deal, as structured, did not really constitute a “sale” — that is, a transfer of effective control over the EL TIEMPO group as a whole, with its print and broadcasting divisions.

Almost no one chose to believe them: Most of the coverage I read on the deal treated the notion that the deal was a “strategic partnership,” not a buyout, as quacking doublespeak.

Telefônica (in Spanish, Telefónica) also had a cellular deal rewritten recently here in Brazil.

It can acquire a stake in TIM, as it merges with (Vivo?) but only if it reduces its stake in a competing cellular operator (Oi? ) to a less than controlling stake.

I think.

I have to check the details.

Let me see if I can find an intelligent analysis of the Anatel ruling.

After a period of gridlock, the agency is under new management — a strategic-planning technocrat and former senior diplomat, Mr. Sardemberg — and seems to be actually getting work done.

Among the steps taken recently: Warning operators that they are going to be cracking done on outrageously bad, when not outright fraudulent, customer service. See

for some hair-rising real-life customer experiences.

It finally — on October 11 — regulated a sort of “bill of rights” for cable TV subscribers, one that has existed in bureaucratic limbo for years. That could well be a hopeful sign for infotainment consumers, if those rules are now enforced effectively..

My wife just decided to cancel her Speedy aDSL subscription with Telefónica. I did not influence the decision, I swear. But I admit to gloating and saying, “I told you so.”
Speedy is not speedy, and it is not — as the Colombian telecoms regulator recently ordered operators to call broadband services whose band is really not that broad — all that “dedicated.”

On the Colombia case, see

Extensive outages are daily, if not more frequent, and connections drop about once an hour, if not more often, depending on the time of day.

It sucks.

Just ask my friend and colleague the Enigmatic Mermaid.

Speedy sucks, right, Merm?

But there is only one other option: Cable broadband from Globo and Carlos Slim.

Which sucks a bit less, but has a long way to travel to the land of five nines and actually providing the bandwidth it advertises.

That being said, I am not, of course, ruling summarily against the AE’s Investimentos on the basis of a single case.

Their Web site has a nice information design, for example, allowing a quick glance at the day’s company news. “AE TV” has a Bloomberg TV look and feel to it to which I tend to be sympathetic to.

And I will need to read a few print issues to get an idea of the general drift of what they are up to.

The Estadão’s own business section tends to be well worth reading.

Editorializing is kept to the editorials hole, news to the news hole. I often learn something. Reporting fairly often — though not always — adheres to the principle of giving plenty of space to various sides of a given case or controversy.

Still: This did not leave a good first impression. And first impressions, as the “corporate shamans” of neurolinguistic programmability constantly insist, are important.

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