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

To: Tony van Werkhooven who wrote (1241)	3/19/1998 10:06:00 AM
From: Doug Chin	Read Replies (1) \| Respond to of 22640

Tony, I liked your idea of using a proxie. If we can find an appropriate proxie for TBR we will be able to assign a P/E and a value with more confidence. Our proxie should be something similar or what someone paid for in a similar situation. I may be totally off base here since I haven't been following the TelCos in LatAm, but of the companies you listed, the ones that intuitively make sense as a proxie are (I'm going strictly by my perception of size as a similarity): SYMBOL P/E (Country) TMX 16.4 (Mexico) TEO 24.3 (Argentina) TAR 19.9 (Argentina) The Argentina phone companies carry a much higher P/E than the Mexican company. So I think the next questions are: 1)Do you think TBR is more similar to the Argentina phone companies than to the Mexican one? 2) Are the governments involved or are they completely private? 3) Any idea why TEO trades at such a high P/E? Was it just privatized or has it been running privately for a while? One other point I would like to explore, which should make things easier: Does anyone know of any LatAm telco that has been privatized in recent history? If so what did it go for? (Price, P/E, market size...) Tony, Thanks for your input, let's see if we can get the brain juices going and get others helping to refine the valuation! PS. I don't know if anyone else noticed this in the TBR annual report, but it SURPRISED me. The TBR average monthly employee salary was R$2,406/mo = R$28,872/yr = US$25,550/yr I don't know what the average salary is in the US, but this is approximately Can$36,800 which is only a couple thousand off the average Canadian income, and I bet they pay much less in taxes than we do and their cost of living is less. So the average TBR employee is probably better off financially than the average Canadian...not bad for a developing country...