Brazil Regulator OKs Telecom Italia, Brasil Telecom Deal"

SAO PAULO -(Dow Jones)- Brazil's telecommunications regulator Anatel, Wednesday approved a proposal by Telecom Italia to renege its rights to vote and veto in Brasil Telecom Participacoes as a means of undoing overlapping interests in the local mobile-phone industry.

Last week, Telecom Italia proposed to put its stake in Brasil Telecom in blind trust after Anatel had requested that the company solve an ownership overlap between Tim Participacoes, its Brazilian mobile-phone unit, and Brasil Telecom, which also offers mobile services, by Oct. 28. Telecom Italia has a 38% stake in Solpart Participacoes, which controls Brasil Telecom.

Telecom Italia will transfer its stake to a company called Brasilco, which will be administered by Credit Suisse Securities.

Anatel approval was the final hurdle for the operation to go ahead.

Under Brazilian law, a shareholder can't process key stakes in two companies with mobile licenses for the same region. Brasil Telecom is Brazil's third-largest telephone company and offers wireless services in the south, center-west and part of the north, while Tim operates across Brazil.

In August 2002, Telecom Italia left the controlling group of Brasil Telecom in order to set up Tim's operations in Brazil. In January 2004, Anatel allowed Brasil Telecom to begin offering wireless services but demanded that Telecom Italia resolve the overlap issue at a future date.

-By Alastair Stewart, Dow Jones Newswires; 55-11-3145 1479; alastair.stewart@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 18th October 2006