Portugal Telecom and Brazil's Oi on Wednesday announced plans to merge their operations and create one of the world's 20 biggest telecommunications groups.

PT's experience and technological know-how and its Brazilian partner's growth potential will be the keys to the success of the new Brazil-based entity, CorpCo, which already has more than 100 million subscribers.

With the tie-up, which still requires shareholder approval, PT is leaving behind its past as a former Portuguese state-owned monopoly to become part of a group whose focus will be on Brazil and other foreign markets.

Together, the firms have nearly 30,000 employees and their combined 2012 sales volume was 12.4 billion euros ($16.8 billion).

PT first entered Brazil's telecoms market in 1998.

Five years later, it formed a joint venture with Spain's Telefonica that combined all their mobile assets in Brazil under the Vivo brand, which became Brazil's largest wireless provider.

PT subsequently sold its stake in Vivo to Telefonica for 7.5 billion euros and used about half of those proceeds to acquire 23 percent of Oi, Brazil's largest fixed-line and broadband provider and fourth-biggest mobile operator.

That 2010 transaction, which sparked a firestorm in Portugal, was led by Mozambique-born engineer Zeinal Bava, who will be CEO of CorpCo.

This long-rumored merger has already prompted debate in the Iberian nation about its repercussions for PT, which is smaller than Oi.

Portuguese analysts noted Wednesday that amid the current climate of consolidation in the global telecommunications industry PT ran the risk of being absorbed by other operators, while the merger deal with Oi at least allows it to control its own destiny.

Under the post-merger shareholder structure, 38 percent of the new group will be held by current PT shareholders.

The merger will generate 1.8 billion euros in savings through operational and financial synergies, the firms said. EFE