Brazil Raises $258.6 Mln for Mobile Phone Licenses (Update1)
By Elzio Barreto
bloomberg.com
Brasilia, Nov. 19 (Bloomberg) -- Brazil raised 921 million reais ($258.6 million) from the sale of mobile-telephone licenses, as companies such as America Movil SA and Qualcomm Inc.'s Vesper SA bet growing demand for wireless services in South America's largest economy will help lift profit.
Brazil sold nine of 10 wireless licenses, with operators offering 31 percent more than the minimum price of 701 million reais, telecommunications regulator Anatel said.
The sale underscores confidence among some international companies that the economy will grow under President-elect Luiz Inacio Lula da Silva's government, investors said. Brazil's bonds and currency have plummeted this year on concern the next administration, which takes office Jan. 1, may default on the nation's debt and fail to revive the economy.
``Operators are saying there is a sign of predictability in Brazil, that they're aware of the direction things will go,'' said Graham Makohoniuk, who manages $650 million in Latin American stocks at Globalvest Management Co., including shares in Brazilian wireless companies. ``So far Lula has said the right things has helped with this predictability.''
Brazil's currency rose for a third day, gaining 1.3 percent against the dollar to 3.5245 as of 3:31 p.m. in New York. Traders said the central bank sold foreign currency to help bolster the real. The benchmark 8 percent bond due 2014 rose 1.5 cents on the dollar to an offer price of 56.25 to yield 19.7 percent, according to J.P. Morgan Chase & Co. prices.
BellSouth
Moves by America Movil, Vesper and Brasil Telecom SA to expand services in Brazil and boost their investment contrast to that of companies such as BellSouth Corp. BellSouth said earlier this month it may sell its two Brazilian mobile phone units that have defaulted or are struggling to repay their debt.
Mobile-phone users in Brazil are expected to rise 78 percent to 58 million people by 2005 from about 32.5 million now, Anatel forecasts.
``This is a very positive sign for the country,'' said Luiz Guilherme Schymura, president of telecommunications regulator Anatel. ``The Brazilian phone market is appealing to many operators, even with all the competition and the investments they must make to expand their network to reach new users.''
The companies are entering a market already crowded with much larger competitors such as Telecom Italia Mobile SpA and Telefonica Moviles SA. Brazil's biggest cities, such as Sao Paulo, Rio de Janeiro and Belo Horizonte will have four wireless operators vying for the same clients.
America Movil's Telecom Americas Ltd. unit won a license to offer wireless service in Sao Paulo, Brazil's most-populous city, with a 309.8 million-reais bid. That helps the unit of America Movil, Latin America's largest mobile-telephone company, to add to its coverage in 11 states.
Telecom Americas
Telecom Americas outbid Brazil's biggest phone company, Tele Norte Leste Participacoes SA, and Vesper, 86 percent owned by San Diego-based Qualcomm, for the Sao Paulo license.
The operator also offered 67 million reais for a license covering Santa Catarina and Parana states, in Brazil's south, and 52.5 million reais for a license in the northeastern states of Bahia and Sergipe.
``We're happy with getting the license as it is in line with our strategy to grow in Latin America and this will complement our services in Brazil,'' said Patricia Ramirez, a spokeswoman for America Movil in Mexico City.
Vesper, the fourth-largest telephone company in Brazil, won a license to offer wireless service in Sao Paulo state, except the capital and adjacent cities. Vesper placed a 115.7 million reais bid for the license.
Vesper also agreed to pay 91 million reais for a license covering Minas Gerais state, the country's second most populous. The company won a license in six states in the northeast with a bid of 93.2 million reais.
`Positive'
``This changes the whole outlook for the company, which will be able to offer both fixed and mobile services in the same phone,'' said Luiz Kaufmann, Vesper's president. ``It will be positive for our growth.''
Vesper's network uses Qualcomm's code division multiple access, or CDMA, standard to offer data and voice services in 17 Brazilian states to about 500,000 subscribers. Kaufmann said earlier this year the company would have to invest $400 million in its network if it were to offer nationwide mobile services. Qualcomm's patents are the basis for mobile phones used by more than 127 million people.
Brasil Telecom SA, the country's third-largest telephone company, offered 191.5 million reais for three licenses, spanning 10 states from Acre in the Amazon region to Rio Grande do Sul, which borders Argentina.
Chief Executive Carla Cicco said earlier this month buying new licenses would be cheaper than purchasing a stake in an existing wireless carrier and would allow Brasil Telecom to offer one-stop shopping for local, long distance, high-speed data and mobile services.
``Brasil Telecom will be one of the big players in Brazil and this license will help us grow,'' by offering new services, said Manuel Ribeiro Filho, director of operations for Brasil Telecom.
Qualcomm shares fell $1.38, or 3.6 percent, to $37.01 on the Nasdaq Stock Market. America Movil dropped 11 centavos to 6.59 pesos in Mexico. Brasil Telecom shares fell 14 centavos, or 1.3 percent, to 10.91 reais in Sao Paulo. |
