Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: LBstocks who wrote (5375)	1/18/2000 12:42:00 PM
From: engineer	Read Replies (1) \| Respond to of 13582

Vesper Takes on Telefonica on Brazil Phones By Shasta Darlington SAO PAULO (Reuters) - U.S. and Canadian partners will launch on Wednesday fixed-line telephone operator Vesper Sao Paulo, going head to head with Spain's Telefonica (TEF.MC) for Brazil's biggest telecommunications market. After dishing out an initial $400 million, Vesper Sao Paulo will begin selling lines in Sao Paulo state's Campinas city on Wednesday and will launch operations in Brazil's financial capital of Sao Paulo city over the weekend. ''We're going to be extremely aggressive,'' Virgilio Freire, the president of Vesper Sao Paulo, told reporters on Tuesday. ''We're going to be a service company; our business is enchanting our clients.'' But analysts said the new company, owned by U.S. firms VeloCom and Qualcomm Inc. (NasdaqNM:QCOM - news) and by Bell Canada International (Toronto:BI.TO - news), will find it hard to conquer more than 10 percent of the market, even with speedy installation, due to its steep prices. Vesper Sao Paulo is betting the state's huge pent-up demand and a waiting list of some 2 million will help in its battle against European giant Telefonica, which recently announced a share swap plan aimed at making it Latin America's biggest telecommunications player. The company said it will deliver its lines within 10 days, whereas some residents have been on Telefonica's Sao Paulo waiting list for more than a year. Vesper Sao Paulo uses a mobile technology for fixed-line phones called Wireless Local Loop, which means that a phone can be installed without extending a wire network to the home. But Vesper Sao Paulo's initial installation fees are almost 12 times as high as Telefonica's, so that even with more benefits and advanced technology, the service will only be an option for high-end customers, analysts said. Vesper Sao Paulo will charge 597 reais ($330), compared with about 50 reais ($28) for a Telefonica line. A telephone line on the black market costs about $550. The network has initial capacity for 500,000 users and will expand that capacity to at least 850,000 by the end of the year. The company plans to invest $300 million this year and spend another $300 million next year, for a total $1 billion over three years, as was initially announced in 1999. The new company will be up and running in 15 of the state's main cities by the end of the month and plans to offer service in 53 cities by the end of next year. Vesper Sao Paulo is one of four ''mirror'' companies created last year to develop competing fixed-line and long-distance carriers and ensure that Brazil's newly privatized phone system did not just turn into a private monopoly. The new carriers will compete with the companies that emerged from the break-up of the national phone company Telebras and were sold off in 1998 for $19 billion. At that time, Telefonica bought Telesp (TLPP4.SA). The Bell Canada group also bought a license to serve 16 states in coastal and northern Brazil under separate local management. Vesper, as the company is called, began competing with Tele Norte Leste (TNLP4.SA) in the region two weeks ago.