Alares to become 4th largest ISP in São Paulo with new acquisition

Brazilian internet service provider Alares is set to become the sixth largest ISP in the country and the fourth biggest in São Paulo state following a just announced deal to acquire Azza Telecom.

With the purchase, Alares will reach 765,000 customers, it said in a releaase. At the end of May, the company had 674,544 telecom contracts, 630,000 of which were for fixed broadband.

The value of the deal was not disclosed but according to market information Alares paid 188mn reais (US$34mn) for Azza.

In an interview with BNamericas last month, Alares CEO Denis Ferreira had hinted a new acquisition was on the way. He also said Alares was a "consolidator" in the market, rather than a potential acquisition target.

In São Paulo, the fixed broadband market is currently led by national telcos Claro and Vivo, followed by Desktop, Alloha, Vero, TIM, Kore Brasil, Algar and Alares.

Considering fiber broadband alone, Alares ranks eighth in the state among telcos and ISPs, and fifth when excluding Vivo, Claro and TIM.

The deal is still pending regulatory approvals. With the acquisition, Alares said it will operate in 228 cities in seven states in the southeast, northeast and south regions of Brazil, and have more than 2,700 employees.

It will be the leader in 40% of the cities in which it operates and second in another 24%, according to the company.

Alares states that its fiber network will surpass 32,000km, bolstered by 8,000km from Azza, addressing a potential market of 3.3mn homes and companies.