The government of Cape Verde and the Brazilian telecommunications group Oi are in contact to clarify the rights of Oi in Cape Verde Telecom (CVT). The government, through a committee set up by the Ministry of Infrastructure and Maritime Economy and Oi Group, are negotiating to obtain an out-of-court agreement on the strategic partnership between the State of Cape Verde and Portugal Telecom(PT) SGPS, which is now owned by Oi.
If the parties reach an agreement, the complaints of the Brazilian company about their rights in CVT, presented to the International Centre for Settlement of Investment Disputes (ICSID) and the International Chamber of Commerce in Paris, will be suspended.
In December 2014, the Cape Verdean government unilaterally broke the strategic partnership agreement with PT, which had been in force since the privatization of Cape Verde’s telecom operator, CVT in 1996. The government justified its termination of the contract by saying that the Portuguese company violated the agreements and sold, without the prior permission of the Cape Verdean authorities, part of the shares it held in CVT to Oi.
Oi, formerly known as Telemar, is the largest telecommunications company in Brazil and South America, both in terms of subscribers and revenues. It is headquartered in Rio de Janeiro and its major subsidiaries include Telemar and Brasil Telecom. By 2013 Oi had 74.5 million subscribers, including 16.9 million for landline, 50.3 million for wireless, 5.3 million for ADSL, and 1 million for other services and also announced its merger with Portugal Telecom, the largest telecommunication company in Portugal, in order to strengthen the Brazilian firm and simplify its ownership structure.