TELESP CELULAR SEEKS TO RECOVER MOMENTUM
FROM HANDSET SHORTAGE
05/06/1999
Wireless Today
A distribution hiccup involving CDMA mobile phones left Telesp Celular
SA [TCP] in the position of being unable to meet subscriber demand
early this year. But the cellular operator appears to be recovering from
this squeeze.
Telesp Celular, controlled by Portugal Telecom SA [PT] with backing
from Telefonica de Espana SA [TEF] after the Telebras privatization
auction conducted by the Brazilian government last summer, today
acknowledged that a "dramatic" shortage of CDMA handsets befell the
company during January and February. The company announced handset
supply deals with both Qualcomm Inc. [QCOM] and Samsung
Electronics Co. Ltd. late last year.
Telesp Celular said the shortage kept its subscriber growth in check for
the early part of 1999. Net subscriber additions for the first quarter
exceeded 200,000, boosting Telesp Celular's overall base to more than
1.95 million. More than 1.7 million were served by the operator's
AMPS-based analog network. CDMA handset supplies became more
abundant early in March, according to Telesp Celular.
Sao Paulo has been shaping up as a competitive battleground for the
CDMA and TDMA camps. After the Telebras privatization, Telesp
Celular surprised many observers by choosing to go with CDMA
technology instead of maintaining its commitment to TDMA established
when it was part of the Telebras system of companies.
B-band carrier BCP, led by BellSouth International [BLS], gained more
than 1 million subscribers in its licensed markets - Sao Paulo and
northeastern Brazil - during its TDMA network's first seven months in
operation. The majority of these customers were on the Sao Paulo
system, now a year in service; BCP's network in northeastern Brazil went
live in the latter half of 1998.
But Telesp Celular's management said today that the incumbent snared
"more than two-thirds of net adds in its concession area" during the first
quarter. The operator's quarterly results also were affected by the
government's mid-January decision to devaluate the Brazilian currency.
Although provisions for bad debts accounted for 11 percent of its
accounts receivable as of March 31, Telesp Celular noted that first
quarter subscriber churn averaged 2.1 percent, down from the 7.4
percent average seen during all of 1998. (Cidalia Morgado, Telesp
Celular, +55-11-3059-7590.)
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