>>Enough of the child antics....sheesh.
Yeah, I have tried to get him to stop. But that would indeed be the triumph of hope over experience.
DJ Telefonica's Terra Invades Latin American Cyberspace
By Keith Huang
MADRID (Dow Jones)--Spanish telecommunications company Telefonica SA (TEF) in recent months has launched itself deep into Latin America's cyberspace, and is poised to extend its online orbit even further.
The Spanish telecom giant has joined the roster of worldwide Internet players, consolidating its Internet interests into one unit, giving it a snappy new name - Terra Networks SA - and planning an initial public offering.
While the Internet is dominated by English speakers, Telefonica has turned to the fast-growing market of Spanish- and Portuguese-speaking Internet users. There are approximately 6.1 million Internet users in Latin America at present, a figure that may double over the next two years, according to a recent report by Merrill Lynch & Co.
Since last March, Telefonica has signed multiple Internet ventures in Latin America, snapping up Website portals and regional Internet companies. Its first large-scale maneuver was to buy a controlling stake in Ole!, one of the Spanish-speaking world's best-known portals.
The Madrid-based Ole! is a portal, a launch-pad Website that offers information and news in Spanish and directs Internet users to Spanish-oriented sites. Ole! also has built regional portals to serve Peru, Chile, Colombia, Venezuela and Uruguay.
In June, Telefonica bought a majority stake in Brazilian portal ZAZ, and in July it formed an alliance with Mexico's Grupo Reforma to expand that company's Infosel Internet service provider by linking it to Ole!.
In September, Telefonica paid Compania de Telecomunicaciones de Chile SA (CTC) $40 million and $8 million in debt for CTC's Internet unit.
Terra Networks Seen Brawling For Latin America Presence
The regional push pits Terra Networks against a handful of regional portals and ISPs, including New-York based StarMedia Network Corp (STRM), Brazil's Universo Online Inc. and Argentina's El Sitio International Corp.
Analysts are bullish on Terra Networks' advances into Latin America, but they say there's some uncertainty as to how cutthroat the marketing and advertising melee in those countries may become.
StarMedia in June said it had begun blanketing Latin America with its free startup software kits, and would soon invade the Iberian peninsula, essentially targeting Spanish and Portuguese speakers worldwide.
"There's room for more than one (Internet company) in Latin America, so it's going to be a very interesting story for Telefonica," said telecom analyst Daniel Lewis of HSBC James Capel in London.
Telefonica is one of the biggest foreign investors in Latin America, providing a wide range of telecommunications services around the region.
U.S. Internet powerhouses like Yahoo! (YHOO), Microsoft Inc. (MSOFT) and America Online Inc. (AOL) also have stuck their flags into the Latin American Internet landscape.
AOL in March signed a $200-million deal with Venezuela's Cisneros Group (E.CIS) to offer Internet services, Yahoo! has created several Hispanic-oriented portal sites, and Microsoft in August bought a 12% stake in the Brazilian cable-television unit of media concern Globo Comunicacoes & Participacoes SA to develop Internet ventures.
But Telefonica has forged its own bevy of U.S.-Spanish Internet relations, via joint ventures with technology giants Cisco Systems Inc. (CSCO), Lucent Technologies Inc. (LU) and Compaq Computer Corp. (CPU).
Terra Networks' mission is not only to strike early in Latin American markets, but also position itself as a competitor in U.S. markets to reach the growing numbers of Spanish-speaking Internet users there.
Analysts Bullish On Terra Networks IPO
All of Telefonica's months-long activity has hyped Terra Networks' upcoming initial public offering, scheduled before the end of the year. Terra Networks will become the first Spanish Internet company to list publicly.
It also will trade on the technology-based U.S. Nasdaq market, a means for U.S. investors to jump aboard the "dot com" IPO bandwagon that has begun to roll through Europe.
HSBC's Lewis said Terra Networks should be warmly received. "At the end of the day, all these incumbent operators in Europe face huge battles on the domestic front."
"With growth rates in mobile phones slowing down a bit, (telecoms) are having to look to other areas, and the Internet is one area where you'll see this explosive growth," Lewis said.
According to Spain's Association for Media Studies, there were about 2.4 million Spaniards 14 years and older who were online in April and May of this year.
That's about 7% of Spain's 35 million citizens, up from 5% in the same period a year ago.
For Madrid-based telecom analyst Luis Padrono of Banesto: "The European markets are soon going to reflect the Internet market in the U.S."
Padrono also said Telefonica may have an advantage in the domestic Internet market as other Spanish fixed-line phone companies that have entered the Internet ring are saddled with less name-brand recognition.
These upstarts must center efforts on developing brand recognition in the Spanish fixed-telecom market, and can't invest as much energy as Telefonica on their Internet activities, Padrono said.
Among the larger fixed-line upstarts since the Spanish telecom market opened fully to liberalization last Dec. 1, Retevision, Jazztel and Uni2 all have rolled out Internet packages. These operators all are offering free Internet connections, in which users dial into the companies' servers, pay local phone fees, but don't pay anything to connect to the Internet.
"What's still going to be key is the quality of Internet service," said Mario Velez, country manager for Spain of UUNET, the Internet services unit of MCI Worldcom Inc. (WCOM).
"If Internet quality isn't up to standards, that will set back the idea of Internet in Spain," he said.
"And one factor still complicating things is the flat-rate tariff," Velez said. "Until we get that in place I don't see an explosion of Internet usage among residential users."
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