Telesystem Intl (TSE:TIW) announcement/Brazil deal
Reuters, Tuesday, April 14, 1998 at 09:40
(Full text of press release from Canadian Corporate News)
APRIL 14, 1998
TIW Wins Second Brazilian Cellular Licence - New Licence Area Has
Approximately 10 Million People
MONTREAL, QUEBEC--Telesystem International Wireless Inc.
(TIW) is pleased to announce that its Brazilian consortium
Telet S.A. has won an "A-Class" licence to provide cellular
services in the State of Rio Grande do Sul in Brazil. The
announcement was made today by the Government of Brazil and
positions TIW as a significant cellular operator in the
Brazilian market. It is the second licence in Brazil for TIW.
TIW's two consortia have been among the most successful
applicants in the cellular auction, with only two other
consortia receiving as many licences. TIW's other Brazilian
consortium, Americel, became Brazil's first private-sector
B-Band cellular operator last November when it launched
commercial service in the Centre-West region.
Known as Region 6 in the cellular license auction, Rio Grande do Sul is the
southernmost state of Brazil and among the most attractive regions in the
country, with a strong and growing economy. It has a population of
approximately 10 million people. The Telet bid was 334.5million reais
(about US$290 million) or approximately US$30 per POP. Under the tender
rules, the bid must be increased by approximately 18 percent or 60 million
reais (about US$53 million) to account for interest and inflation since
April 7, 1997 the original bid submission date.
"Brazil offers staggering growth potential for cellular services and we are
extremely pleased to have acquired a second license especially at such an
attractive price" said Bruno Ducharme, President and Chief Executive
Officer of TIW. "We have secured a strong foothold in one of the world's
most coveted cellular market, bidding an average of US$28 per POP for our
two licences, well below the overall auction average of approximately US$53
per POP. The success we have achieved so far in penetrating the market at a
low entry cost points to a strong value creation potential from our
Brazilian cellular ventures" added Mr. Ducharme.
"We are particularly pleased to have won Region 6" said Gerard M. Vazquez,
Vice President and Executive Director of TIW for Latin America and
President and CEO of Telet S.A. Rio Grande do Sul has a strong economy
with a broad industrial and agricultural base, and a large number of
prosperous, well-developed cities with excellent market potential", added
Mr. Vazquez.
The members (voting interest) of the Telet S.A. consortium are TIW (20
percent) and BCI (20 percent) as operators, Citibank (9 percent), and a
group of eleven large Brazilian pension funds and financial institutions
(51 percent). TELET expects to complete the licensing contract with the
Brazilian Government within 5 days.
Telet's sister consortium, Americel, launched commercial service in the
Centre-West region last November, less than five months after obtaining its
license, and has currently over 45,000 subscribers. The Centre-West region
is the top ranked "B" class territory with a population of approximately 14
million residents and includes the capital city Brasilia as well as six
surrounding states. The Americel bid was approximately US$23 per POP. The
members (voting interest) of the Americel consortium are TIW (20 percent)
and BCI (20 percent) as operators, Citibank (9 percent), and a group of ten
large Brazilian pension funds and financial institutions (51 percent).
TIW is a global wireless operator. It develops, owns and operates a
geographically and technologically diversified portfolio of wireless
telecommunications networks in several countries in Europe, Asia and Latin
America. TIW provides digital cellular services in Romania, Brazil, India
and China. The Company also provides specialized mobile radio (SMR)
services in France, Germany, Spain and the United Kingdom, as well as
paging services in Mexico and The Netherlands. TIW is listed on The
Montreal Exchange and The Toronto Stock Exchange under the symbol "TIW".
FOR FURTHER INFORMATION PLEASE CONTACT:
Telesystem International Wireless Inc.
MARK BOUTET
Director, Communications
(514) 673-8406
mboutettiw.ca
or
Telesystem International Wireless Inc.
PIERRE FITZGIBBON
Executive Vice-President and Chief Financial Officer
(514) 673-8466
pfitzgibbontiw.ca |
