Exclusive: Telecom Italia working on new investment plan for Brazil- source
MILAN (Reuters) - Telecom Italia's Brazilian unit is considering investing an extra 750 million euros (2.27 billion Brazilian real) over three years to improve its local mobile phone network, according to a person with knowledge of the plan, as the Italian company tries to regain momentum in a key market.
The plan ? called Turbo ? could be approved by TIM Brasil's board by the end of October, the person said.
The Italian telecoms company was left in the lurch last month after it lost out to Spain's Telefonica in a $9 billion battle to buy a Brazilian telecoms business that had been put up for sale by French media firm Vivendi .
The big issue at Telecom Italia is now how chief executive Marco Patuano will reshape the group's strategy to compete in a saturated European market and adjust to consolidation that is creating bigger global rivals.
In Brazil, Telecom Italia faces yet more challenges. For years, the country has largely avoided the consolidation sweeping Europe because of its robust economy. But after mobile phone subscriptions in Brazil more than trebled in the eight years to 2012, growth in the continent's biggest economy has slowed, reducing the promise of the 200 million person market.
The telecoms sector in Brazil has already started consolidating due to Telefonica's purchase of GVT and last year's merger of Brazil's Oi and Portugal Telecom . Consolidation among the country's four mobile operators is now brewing, and Telecom Italia's TIM Brasil could end up either as a target or as a buyer.
To strengthen its position in the market as well as in pending deal-making, TIM Brasil is considering a plan that would plow 750 million euros over the next three years to strengthen its 4G and 3G network infrastructure, the person said.
Telecom Italia declined to comment.
The loss of the bidding battle for GVT turned Telecom Italia into a potential prey in the fast consolidating telecoms industry, raising expectations Brazilian telecoms operator Grupo Oi could pursue plans to bid for TIM Brasil.
But the M&A scenario in Brazil took another twist more recently and a source with knowledge of the situation said this week TIM Brasil had hired Banco Bradesco to analyze a potential bid for Oi.
(Editing by Alessandra Galloni)