The dilemma that Brazil?s anti-trust department created for Telefónica yesterday did not surprise the Spanish global telecommunications firm. Telefónica already knew the struggles that it would find in that market when it decided to make a bet on Telecom Italia.
And so it was. Despite major risks, the local regulator begged Telefónica to choose the Brazilian subsidiary Vivo or abandon its Italian business, something the company is not willing to do at this point.
All the prior commotion reveals a third but less dramatic issue, which could possibly be the real theme of the deal: forcing Telecom Italia to sell its subsidiary TIM Parcipacoes so that Brazil can own this asset.
