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To: JMD who wrote (22298)	2/1/1999 5:33:00 PM
From: bananawind	Respond to of 152472

To All: more on the Brazil WLL project... WLL International banks on bringing service to Brazil By Lynnette Luna The timing was right for an Englewood, Colo.-based firm and other consortium members to win a regional mirror license in Brazil to provide Code Division Multiple Access-based wireless local loop service. WLL International Inc., which owns a 34.4-percent interest in the consortium along with partners Bell Canada International Inc. (34.4 percent), Qualcomm Inc. (16.2 percent) and two Brazilian companies (15 percent), won a license earlier this month to offer local service to the northeastern region of Brazil, comprising 16 states and including major metropolitan areas like Rio de Janeiro. The Brazilian government, as part of its privatization plans, is auctioning mirror licenses in an effort to create competition for the recently privatized regional Telebras operating companies. Brazil already has auctioned 18 cellular phone licenses in A- and B-band auctions. The consortium, Canbra Telefonica S.A., was the only group in the running for the northeastern license, and as a result of the devalued currency in the country, it walked away with a bargain. The consortium had bid $50 million for the license, but by the time it was awarded the license, the falling currency meant the consortium owed only $38 million. ‘‘When our company was in the development stage last June, the mere thought of bidding in the mirror auctions was ludicrous because of all the big dogs bidding for licenses,'' said WLL International Chief Executive Officer David Leonard. But the strains of the Asian economic crisis and cross-ownership problems have limited the participation of larger operators in the auction. The consortium's only competitor for the license, Splice do Brasil, was disqualified because it held a stake in another business that would conflict with ownership of this license. The government is expected to grant two more regional mirror licenses in the coming weeks, but may delay the event because of economic problems plaguing Brazil. WLL International and its partners now have the enormous task of deploying CDMA technology and point-to-point and point-to-multipoint technology to a geographic area roughly equal in size to three-quarters of the continental United States. The consortium plans to invest more than $1 billion in the region and build out service in 31 cities by the end of the year. Fifty-one cities are slated by the end of three years. Qualcomm and Nortel Networks are the consortium's infrastructure providers and are supplying vendor financing. Auction rules require mirror companies to serve all cities with more than 200,000 inhabitants by Dec. 31, 2001. Leonard launched WLL International last June, teaming with Fred Vierra, who is chairman of the board and former CEO of Tele-Communications International Inc. Both were involved in the cable industry in Brazil and understood the need for basic telecommunications services in the country. An unmet demand exists for about 4 million telephone lines, said Leonard. ‘‘We want to offer tiered services tailored to the needs and ability of customers' ability to pay,'' said Leonard. ‘‘We are not subject to set tariffs. The objective of the government is not to maximize proceeds, but advance telecom infrastructure.'' Nick Kauser, former executive vice president and chief technology officer with AT&T Wireless Services Inc., is the company's interim CTO. WLL International's equity sponsors include Telecom Partners, Centennial Funds and Crescendo Ventures. WLL International's strategy is to provide fixed WLL to secondary markets in Latin America, eventually creating a presence and strategic leverage throughout these markets. Argentina, Chile and Mexico also are on the company's radar screen, and it plans to develop businesses as the majority owner from the ground up and through acquisitions. Leonard said the company anticipates a recession in Brazil, which is accounted for in WLL International's business plan. ‘‘We're taking a realistic approach to the market. Our business plan is built on the assumption there would be a devaluation,'' he said. ‘‘Brazil has a bright future.'' Brazil's central bank earlier this month devalued the real then allowed it to free float with the U.S. dollar, resulting in the currency losing its value against the dollar. Latest Issue