With Brazil in the midst of its worst economic recession in a quarter of a century, Telecom Italia (TI) CEO Marco Patuano said the company will review its strategic plan for the country.
Telecom Italia owns two thirds of TIM Participacoes SA, Brazil’s second largest operator, and generates approximately 30 per cent of its total revenue from the country.
Ahead of the company’s board meeting in Rio this week, Patuano told Bloomberg TI is “focussed at the moment on organic investments, but we need to review the strategic plan since the situation in Brazil worsened a lot”.
This month, Standard & Poor’s cut Brazi’s credit rating to non-investment grade, while its currency, the Real, posted the worst performance this year among the emerging markets, with a 14.5 per cent drop.
Telecom Italia revealed big plans to boost its investment in the country in February. The company said it would plunge BRL14 billion ($3.6 billion) to beef up its 4G offering in the country and extend the connectivity to more than 15,000 sites, while also extending 3G coverage to 14,000 sites by 2017.
“Most of our investment in Brazil will continue to be in US dollars,” he added.
The company, which is also reviewing its strategy for its tower unit Inwit, said this week it was open to all options regarding the future of the business, but had not yet received a bid for it.