Telefónica, Portugal Telecom to Discuss Strategic Differences This Week"

The CEOs of Telefónica and Portugal Telecom are scheduled to meet this week to discuss strategic differences concerning their Brazilian joint venture Vivo, Portuguese newspaper Diário Económico reported.

Telefónica chairman César Alierta has been urged by key shareholders to resolve differences with PT's chairman Henrique Granadeiro before PT's board meeting on March 21, the newspaper reported sources as saying.

Telefónica, which holds almost 10% of PT, recently supported a hostile bid for PT by rival Portuguese conglomerate Sonaeco, and is believed to have done so in the hope that Sonaeco would go on to sell it PT's stake in Vivo. But other PT shareholders eventually won a vote to reject the 11.6bn-euro (US$15.3bn) takeover bid.

The conflict of interests has led to speculation that Telefónica would sell its PT stake, prompting Granadeiro to say this "would not be a tragedy in the slightest."

VIVO

PT recently said it plans to maintain its exposure to the Brazilian telecoms market through Vivo or through another operator, while Telefónica has made no secret of the fact that it wants to secure control of Vivo, Brazil's largest mobile operator with just over 29mn subscribers at end-2006.

"If there were a natural buyer for Vivo, it would be PT,'' Granadeiro said in a recent interview. Content is increasingly the future of telecoms and the language used to process communications in Vivo is Portuguese, not Spanish, according to the CEO.

"Brazil is a place where we think we should be, either through Vivo or through another operation we consider attractive,'' Granadeiro said in an interview on PT's website.

But, the executive also indicated that PT could be willing to sell Vivo. "There are no assets that can't be sold," news agency Bloomberg recently quoted him as saying."

Posted to the site on 20th March 2007