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To: limtex who wrote (18291)	11/13/1998 9:42:00 AM
From: Jeff Vayda	Respond to of 152472

News from Brazil: BRAZIL'S TELESP CELULAR COUNTS ON DIGITALIZATION TO SPUR GROWTH Telesp Celular SA, the largest cellular operator in Brazil, served nearly 1.6 million subscribers in the Sao Paulo area as of Sept. 30, reflecting a modest increase of 24.3 percent from the end of 1997. It marked the first time that Telesp Celular disclosed operational and financial statistics since the July privatization of the company and a handful of other wireless operators that had been part of Telebras SA [TBR] previously. The company's performance is significant since it faces a strong competitive challenge from B-band operator BCP Telecomunicacoes, a consortium in which BellSouth International [BLS] is the lead operating partner. In the space of several months since launching commercial service, BCP had amassed a base of 485,000 subscribers as of early September. Telesp Celular, in which Portugal Telecom SA [PT] and Telefonica Internacional [TEF] hold operating interests, estimated subscriber churn at about 7 percent over the first three quarters of 1998. But it said such figures "are of little value" because of market conditions spawned the economic turmoil seen in Brazil earlier this year. Telesp Celular also said it will come to grips with capacity problems by launching digitally upgraded service next week, a move that will speed efforts to migrate analog subscribers to digital. Minutes of use rose to a monthly average of 197 over the nine-month period (109 outgoing, 88 incoming) -- up from last year's levels. Telesp Celular said its nine-month net income amounted to $218 million on revenues of more than $1.27 billion; comparable year-earlier figures were not disclosed because the company was then a part of Telebras. Average monthly revenues per subscriber and service activation fees were lower, while monthly service charges accounted for a higher proportion of Telesp Celular's revenues than in the comparable nine-month period last year. Telesp Celular's management said cellular demand in Sao Paulo is expected to remain "strong. Following the launch of our digital service, we look forward to benefiting from meeting unsatisfied demand," it said. Telesp Celular took the surprising move last week of awarding an IS-95 CDMA infrastructure contract to Lucent Technologies Inc. [LU]. Previously, Telesp Celular had used IS-136 TDMA as its digital air interface. (Cidalia Morgado, Telesp Celular Participacoes SA, +55-11-3824-5731.)

To: limtex who wrote (18291)	11/13/1998 10:43:00 AM
From: Harvey Rosenkrantz	Read Replies (2) \| Respond to of 152472

The reason that wK will be successful is that for certain things the large telecoms have come to rely on outside services. A simple example is information services. When you dial 411 you now most likely will get someone at a remote location (not in your home town) and often from a company that has contracted to provide those services. If wK becomes the premier provider of wireless digital and internet interface, they do not have to have every one of these 800lb gorillas as their customers. On another topic (3G): I just saw a blurb on the EU vs America "banana wars". For those who are not current on the latest world conflicts, the EU has written import specifications that favor bananas from former colonies in Africa and the Carribbean(?sp) over those from Central and South America. This is a huge chunk of business that by virtue of higher pricing due to the tariffs and non tariff barriers (size, shape & texture) virtually excludes these growers. This battle has been ongoing to my knowledge for at least 7 years and if one were to do diligent research I suspect that the duration has been much longer. The point about the bananas is that the EU is quite capable of making self serving, ethnocentric, arbitrary decisions affecting world trade and sticking with them ad nauseum. It will be an uphill battle to try to force them to open their markets. It would be much better to come to a negotiated settlement.