A bad call

“OI” IS a cheerful, informal greeting in Brazilian Portuguese. But after the telecoms operator of the same name made the largest bankruptcy-protection filing in Brazilian history on June 20th, the country may finally be saying goodbye to its hopes of creating a strong, state-backed national champion. Brazil’s interim government says it will not bail out the company, which is in debt to the tune of 65 billion reais ($19 billion). State-controlled banks have not been prepared to forgive what the firm owes to them. Parts of the company could be sold off to foreign buyers.

Oi was once treated more favourably by the government. The product of a state-sponsored merger eight years ago aimed at building a homegrown giant in a market dominated by foreign firms, Oi was even regarded as a potential global player. It is the country’s largest fixed-line firm, but has struggled to compete with international rivals in the much more lucrative mobile market, where it is Brazil’s fourth-largest operator, despite lots of official funding and regulatory changes in its favour.

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