Brazilian CDMA Operator Considers GSM overlay
cellular-news.com
Brazil's largest mobile operator Vivo is consulting suppliers about the cost of building a GSM network overlay, reported local newspaper Gazeta Mercantil.
Vivo, Brazil's sole CDMA network user, is consulting with major companies such as Ericsson, Siemens, Nokia, Huawei and Alcatel to determine the cost of such an overlay, according to the paper.
Such a project could account for almost 2bn euros (US$2.51bn) of the 9bn-euro global investment budget planned for 2006-09 by Vivo co-owner Telefónica, according to a recent report by US investment bank Merrill Lynch in May.
Merrill Lynch downgraded Vivo saying its share price did not reflect the risk of a significant increase in investments, the loss of clients and pressure on operating margins that a migration to GSM could cause.
"The cost depends on how fast Vivo wants to implement the network, with rumors ranging from anything between US$2bn to 4bn euros," said Carlos Constantini a telecoms analyst at Deutsche Bank Equity Research.
Although Vivo could lose clients due to uncertainty about its capex, the financial markets have probably overstated the negative side, Constantini told BNamericas.
Vivo's owners, Telefónica Móviles and Portugal Telecom, also recently established a group of top tier executives to restructure Vivo's business strategy and halt the company's sliding market share.
Vivo maintained its leadership in May, but witnessed a slip in its market share to 32.99% of subscribers from 33.33% in April 2006 and from 40% in January 2005.
BNAmericas.com |
