Reports emerged Thursday that Vodafone may not after all be bidding for Brazilian wireless carrier, TIM Participacoes as has been widely expected. Vodafone, the biggest mobile phone company in the world in terms of revenue, may not bid given the toughness of the Brazilian telecoms market for new companies.

According to analysts, the Brazilian telecoms market has gotten tougher to survive for new companies seeking telecoms investment into the country. Even though it is the biggest telecoms market in Latin America, and thus lucrative; foreign firms undertaking new investments in the sector have encountered tough challenges.

Vodafone, based in the UK, has been the subject of mounting speculation over a potential stake purchase in the Brazilian mobile operator, TIM Brasil. Speculation has it that Vodafone was keen on securing a majority stake in TIM Brasil, Telecom Italia’s Brazilian unit. Brazil is a crucial market for global telecoms players given its huge population of mobile users.

The country has four wireless carriers and about 80% of its 190 million people are mobile phone users. The speculated Vodafone bid follows the isolation of TIM Brasil, Brazil’s third biggest mobile phone operator, due to the takeover of Vivo by Telefonica from Spain. Previously, Vivo was the telecoms market leader in Brazil. Other than the Vivo purchase, TIM Brasil has also found itself isolated due to the acquisition of a stake in Oi by Portugal Telecom, after the Portuguese telecoms firm sold its 50% stake in Vivo to Spain’s Telefonica.

These arguments were raised by Eduardo Falco, Oi chief executive, adding that, for Vodafone to enter the Brazil telecoms market, it will need more than the help of the Italian firm, TIM Brasil. That arises from the fact that the two firms, Vodafone and Telecom Italia, and others in the Brazilian market are fierce competitors thus it may not be that easy to make a breakthrough in the Brazilian telecoms industry, he said.

The telecoms sector in Brazil is one of the most dynamic in the country’s rapidly growing economy over the last one year. The past one year has witnessed major takeovers, with major players buying out their small rivals in a bid to expand their portfolios.

Vodafone Group Plc is the world’s leading mobile telecommunications company, with a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company’s subsidiary undertakings, joint ventures, associated undertakings and investments.