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 : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: slacker711 who wrote (31250)	1/16/2003 10:47:12 AM
From: slacker711	Read Replies (1) \| Respond to of 196446

Telesp buys a TDMA operator (TCO). biz.yahoo.com Dow Jones Business News Telefonica Moviles Steps Up Brazil Presence Thursday January 16, 6:10 am ET By Enza Tedesco, Of DOW JONES NEWSWIRES MADRID (Dow Jones)--Telefonica Moviles SA and Portugal Telecom's joint venture, Telesp Celular Participacoes SA, increased its leadership in the Brazilian mobile market by agreeing Thursday to purchase Brazilian mobile operator Tele Centro Oeste Participacoes SA, or TCO, from FIXCEL. Analysts said the move makes financial sense for Telefonica despite the risks involved with increased exposure to Brazil. The deal means Telesp will now reach 16.8 million users, approximately 11 million users more than the second mobile carrier in Brazil, Telecom Italia Mobile, and have a market share in excess of 50%. The acquisition, pending approval of the Brazilian authorities, will take place in three stages, the first of which sees the acquisition of 61.1% of TCO's voting capital for EUR404 million. Based on that price, analysts estimated that 100% of the mobile unit is worth EUR662 million. The acquisition will be financed through a combination of cash already available on the balance sheet of the joint venture companies, cash flow generation and financing of real-denominated debt in the local market. In light of the fact the buy won't require financial support from shareholders, Merrill Lynch analyst Jesus Romero said the move is "clearly positive and makes sense." At 1020 GMT Telefonica Moviles shares were down 0.2% at EUR6.77, having risen slightly at the market open, while Portugal Telecom shares were down 0.6% at EUR7.13. Juan Tuesta, an analyst with Banesto, highlighted that Telefonica Moviles had an extremely "healthy" cash position and, if anything, the company had to look at ways to invest that extra cash. "It's always good for a company to have some debt. But with its extra liquidity, they had to consider their options and develop a business opportunity," Tuesta noted. "They opted for Brazil and that is a good market to grow." With this purchase, Telefonica Moviles increases its exposure in Brazil by between 3% and 3.5%, he estimated. Although a greater presence in Brazil means also a greater exposure to currency fluctuations and potential risks of the region, Tuesta said that overall the company's move to bid for Latin America makes sense from a strategic and financial standpoint. He added that the price paid was a "good" one and said "the multiples over ( earnings before interests, taxes, depreciation and amortization) and over the client number are pretty reasonable." As for the Latin American-related uncertainties, other analysts said that only time will tell whether Telefonica Moviles will be rewarded or penalized for its move in Brazil. By Enza Tedesco, Dow Jones Newswires, 34-91-3958122,