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To: Drew Williams who wrote (13742)	8/14/1998 11:51:00 AM
From: straight life	Respond to of 152472

After Telebras, investors look at Brazil mirrors By William Schomberg BRASILIA, Aug 13 (Reuters) - With the dust barely settled after the $19 billion privatization of Telebras two weeks ago, top international telecommunications companies are turning to the next big opportunity in the Brazilian telecom sector. Executives of leading operators and equipment manufacturers from Europe, the United States and Brazil gathered in the Brazilian capital Thursday for a run-down on how the government plans to sell ''mirror'' concessions to compete with Telebras. Among the firms represented at the packed public hearing were operators Bellsouth Corp. (BLS - news), France Telecom (FTE.PA) and GTE Corp. (GTE - news) plus a host of technology companies like Qualcomm Inc. (QCOM - news), Motorola Inc. (MOT - news) and Northern Telecom Ltd. (NTL.TO - news). ''The success of the Telebras (TELB4.SA)(TBR - news) privatization has generated a lot of interest in what's going on in Brazil's telecommunications sector,'' said Renato Guerreiro, president of new industry regulator ANATEL. Under Brazil's plan to promote competition in the telecommunications sector, the government will auction three, regional, fixed-line concessions to compete with each of the three fixed-line Telebras subsidiaries sold July 29. Also for sale is a concession to compete with the former Telebras long-distance and international carrier Embrace. ANATEL plans to sell the licenses by the end of the year. Unlike the sale of Telebras' units, which went to the highest bidders, groups seeking to buy the concessions will be judged principally on their proposals for installing new lines. Although the mirror companies will have to start from scratch, they will not be subject to the strict expansion targets the new buyers of Telebras have to observe. ''That's a big difference. The targets are achievable, but they are ambitious,'' said Jose Pees Barchan, digital cellular sales manager with Hughes Network Systems. He said Hughes was considering participating in a group to buy one of the mirror concessions. Other interested parties attending Thursday's hearing included BellSouth Corp. The U.S. carrier hit the headlines in Brazil last year when it and partners paid $2.45 billion, more than four times the asking price, for a cellophane license in Sao Paulo city. The group also runs cellular operations in Brazil's northeast. BellSouth surprised many market-watchers again last month when it opted not to take part in the Telebras auction. ''We did our analysis and we thought it better to wait,'' said Robert Meer, BellSouth's chief strategist for Brazil. He declined to comment on whether or not BellSouth would be bidding for the mirrors. ''Some companies prefer to start up from scratch, installing their own networks. We've had experience in the latter but that doesn't mean that is our preference,'' Meer said. But one of BellSouth's partners in the cellophane ventures said the companies were likely to line up again for the mirrors. ''There is a strong possibility that the same group that won Sao Paulo will get together again,'' said Mario Caesar Pareira de Ara, a director of Brazilian telecommunications equipment manufacturer Splice do Brasil. Splice is a minority partner in both the cellular ventures led by BellSouth and Brazilian bank Banco Sara. De Ara said the group would ''probably'' be most interested in the mirror concession covering Sao Paulo state. A representative of GTE said his company was interested in the mirror concessions and wanted a foothold in Brazil to tie together its existing operations in Argentina and Venezuela. ''Brazil is an important piece because it is between the two and, clearly, is much bigger than both of them,'' said Jose Eugenie Guiscard Ferrara, president of GTE Brazil. ------------------------------------------------------------------------