LatAm Telcos: Consolidation Lessons: Case Study on Brazil Mobile, 2022

Research evidence excerpt

LatAm Telcos: Consolidation Lessons: Case Study on Brazil Mobile, 2022

J P M O R G A N Latin America Equity Research

24 June 2026

LatAm Telcos

Consolidation Lessons: Case Study on Brazil Mobile,

Amid a wave of telecom consolidation, we are launching a series of Latin LatAm Technology & Telecom /

American case studies, beginning with Brazil’s 2022 mobile consolidation. Our Education

goal is to equip investors with a repertoire of case studies to support the analysis Marcelo Santos, CFA AC

of consolidations happening currently in countries such as Colombia (which can (55-11) 4950-3708

be played via OW-rated Tigo) and Argentina (exposure via OW-rated TEO). marcelo.p.santos@jpmorgan.com

Livea Mizobata

• A brief summary on the mobile market consolidation. Prior to the deal, the (55-11) 4950-3604

market was intensely competitive, operating under a four-player structure livea.mizobata@jpmorgan.com

(Vivo 33%, Claro 28%, TIM 20%, Oi 16%). In June-20, as part of its Chapter Banco J.P. Morgan S.A.

11 process, Oi initiated the sale of its mobile business, which was acquired by

a consortium between Tim/Vivo/Claro on Dec-20 and approved by the antitrust

on Feb-22. This initiated the consolidation into a three-player structure and a

subsequent market repair.

• Buyers paid a rich valuation for consolidation. The acquisition took place

at what looked like a very high multiple of ~9x EV/EBITDA’20E as per our

estimates, despite the multiple of Brazilian telcos averaging ~4.5x at the time.

However, under the consolidator's perspective with margins and synergies, it

goes down to 3.7x EV/EBITDA. We see two main reasons: (1) the acquired

revenues come with almost no fixed costs, driving ~70% EBITDA margins,

thus the real multiple for the buyer was lower; (2) market repair.