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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (21081)	6/28/2000 4:50:00 PM
From: Steve Fancy	Respond to of 22640

ANALYSIS-Brazil woos new telecom players with PCS licenses Reuters, 06/28/2000 16:17 By Katherine Baldwin SAO PAULO, June 28 (Reuters) - Brazil's burgeoning telecommunications industry, already a patchwork of European and U.S. competitors, is wooing fresh players this year as the government auctions off the latest set of wireless licenses. Brazil plans to sell PCS (Personal Communications Services) licenses, a technology that analysts say could power a third of all wireless phones in Brazil by 2005 and bring in as much as $5 billion in fresh investment. But Brazil's choice last week for a PCS frequency band widely used in Europe -- 1.8 GHz -- and one that's virtually incompatible with existing networks in Brazil will prompt new competitors to enter the game, particularly Europeans, industry experts said. "The 1.8 GHz option is favorable to those who don't already have operations in Brazil," said Luis Carvalho, a telecom analyst at Morgan Stanley Dean Witter in New York. "This is good for new entrants." The sale of PCS licenses, scheduled for the end of this year, should add more nationalities to an already multi-cultural industry where the likes of Spain's Telefonica (MADRID:TEF), Portugal Telecom (LIS:PTCO) and Bell Canada International Inc. (TSE:BI) rub shoulders. Brazilian mobile carriers use technologies called TDMA or CDMA. As yet, mobile phones can't roam from those technologies to 1.8 GHz, meaning existing carriers would have to build new networks that wouldn't be compatible with their existing ones. But the PCS auction could catch the eye of companies like Vodafone Plc (ISEL:VOD), British Telecommunications Plc (ISEL:BT) and Deutsche Telekom . They're familiar with the technology known as GSM, used at 1.8 GHz, and have yet to enter Brazil, analysts said. "It's probable that operators will prefer to stick to one type of technology," said Alex Waisberg, special projects manager at Algar Telecom Leste, or ATL, a Rio de Janeiro-based wireless operator. PCS technology is designed to transmit voice and data and allow Internet access over mobile phones at a faster pace. NEW NAMES, SOME OLD FACES Still, some established carriers in Brazil could be reluctant to cede ground to fresh competitors. For Spain's Telefonica, currently with CDMA and TDMA wireless networks in Brazil, PCS licenses would permit it to extend its footprint into other areas of Brazil. And the fruits are attractive. The Yankee Group research organization estimates the number of PCS users in Brazil will hit 15.7 million by 2005, up from zero now, compared with 31.6 million users of other cellular technologies. "Telefonica is always looking for new cellular businesses," said Gonzalo Alonso Hernandez, services development director at Telefonica's cellular division in Brazil. "Telefonica has the experience, technology and expertise to work in whatever technology." Intelig, a long-distance fixed phone company 50-percent owned by Britain's National Grid Group Plc (ISEL:NGG), said Tuesday it was looking for partners to bid for the PCS licenses to offer wireless services. Companies like the Sprint PCS Group (NYSE:PCS) component of Sprint Corp. (NYSE:FON) and Bell Atlantic Corp. (NYSE:BEL) may also be eager to take the bait, analysts said. Still, the participation of new and existing companies will depend on the game rules. Brazil's telecom regulator, the National Telecommunications Agency, or Anatel, has yet to decide how many licenses will be sold and for what regions. Anatel may also limit existing wireless operators from bidding for PCS licenses in their own regions, analysts said. "Things depend a lot on how Anatel decides to divide up this market," said ATL's Waisberg. The choice of 1.8 GHz reserves the 1.9 GHz bandwidth, a U.S. standard, exclusively for "third generation" technology, which allows for the transmission of greater volumes of voice, data and images at a faster pace. That definition should speed up the sale of third-generation licenses in coming years, analysts said. katherine.baldwin@reuters.com)) Copyright 2000, Reuters News Service