Brazil’s antitrust watchdog has recommended the conditional approval of a major network sharing expansion agreement between telecom giants TIM S.A. and Telefônica Brasil S.A. (Vivo).
The General Superintendence of the Administrative Council for Economic Defense (SG/CADE) released its recommendation on Thursday, raising concerns about the potential anticompetitive impact of the proposed deal and calling for strict limitations on its implementation.
Under the proposed amendments, TIM and Vivo sought to extend their existing network sharing arrangements—first approved by CADE in 2020—to thousands of new municipalities across Brazil. Specifically, the operators aimed to add 2,722 municipalities under the so-called “Apagado 2G” contract and 1,634 municipalities under the “Single Grid” agreement. Combined, the expansion would allow the companies to collaborate in 98 percent of Brazilian municipalities, all of which have populations under 30,000.
SG/CADE, however, found that such a sweeping expansion could undermine competition in the telecommunications market. According to the agency’s technical assessment, the proposed terms would effectively grant the two companies an indefinite and overly broad right to operate jointly in vast parts of the country. Regulators warned that this could reduce market rivalry, particularly in the wholesale segment, and lead to coordination between the firms in areas where independent network investment would otherwise occur.
In its decision, the Superintendence recommended that the expansion be substantially scaled back. Only 66 municipalities under the Apagado 2G contract and 158 under the Single Grid agreement would be allowed to proceed, limited to locations where the companies demonstrated clear technical justifications for sharing infrastructure. These justifications include operational incompatibilities between legacy and modern network technologies that could be addressed through collaboration.
Importantly, SG/CADE decided to publish the list of municipalities included in the approved scope, rejecting a confidentiality request by the parties. The agency argued that transparency is essential to allow smaller service providers and other market participants to scrutinize the agreement and monitor for any anticompetitive practices. The publication of the data also aims to reduce information asymmetries between the companies and regulatory authorities, which could otherwise facilitate tacit coordination and limit effective competition.
Despite the concerns, SG/CADE acknowledged that the proposed amendments do not alter the fundamental network architectures or governance structures approved in previous decisions. The technical frameworks—MORAN, MOCN, and GWCN—remain unchanged, and the companies will continue to operate independently. The financial terms of the agreement also remain based on fixed-rate compensation between the parties.
The agency further noted that because the municipalities in question all have fewer than 30,000 residents, the industrial use of shared network infrastructure in those areas does not require prior approval from the National Telecommunications Agency (Anatel). However, Anatel will remain responsible for monitoring the technical and regulatory conditions of the partnership going forward.
The final decision now rests with CADE’s Administrative Tribunal, which will evaluate the case based on the Superintendence’s recommendation. If adopted, the ruling will limit the network sharing deal to just 224 municipalities and impose important safeguards aimed at preserving competition in Brazil’s mobile telecommunications market.
While the partnership between TIM and Vivo promises efficiency gains and cost reductions through shared infrastructure—particularly in expanding 4G coverage and optimizing legacy 2G networks—the agency concluded that such benefits must be carefully balanced against the risk of reduced rivalry and long-term market harm.
