Considering MCI is the controlling shareholder of Embratel, this win is even more significant.
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Embratel (Empresa Brasileira de Telecomunicações) as created on September 16th, 1965, as a mixed economy company with the goal of uniting Brazil through communications. On July 29th 1998, by occasion of Sistema Telebrás auction, the american company MCI acquired the stock control of Embratel.
MCI Communications Corporation, Embratel's controlling shareholder, is the second largest company in the american long-distance telephony market, its value estimated on US$ 80 billions. Leader on creation and supply of information technology services to private and corporate users in USA and in the rest of the world, MCI was born with a talent for competition. Since its creation, in 1968, it's recognized as a pioneer for having started competition on the long-distance telephony market. With its headquarters located in Washington, D.C., MCI's annual revenue is US$ 20 billions, with 60 thousand employees worldwide.
From its main activity, which is long-distance call service, MCI began to conquer new and important markets, such as integration systems, Internet and local phone services in USA, all of them estimated on US$ 100 billions. Thanks to MCI One and Network MCI One, both created in 1996, MCI improved on integration of long-distance service with local wireless service, Internet, data transmission, paging, teleconference and other international telecommunication services.
MCI has just invested US$ 2 billions on local telephone market and has been a leader in competitive promotions for american consumers. In terms of Internet development, MCI plays a main roll, offering one of the most advanced portfolios in the world, supplying products and services related to Internet and Intranet solutions. MCI's Internet backbone is one of the most advanced in the world and works as a platform for access services, software, hosting and Web site browsing, operating at the record speed of 622 Megabits per second. It is estimated that Internet market will grow up to US$ 100 billions until year 2000.
MCI also supplies long-distance phone services from USA to other 300 destinations in different countries, offering client support in more than 20 languages and a wide variety of international telecommunication services. These services are rendered by means of MCI's own network installations and also through many global companies' networks, with which MCI supports alliances.
MCI International became a subsidiary of MCI Communications Corporation after the acquisition of Western Union International, a company with more than 75 years of experience on the global communication market. Being the first alternative as a voice service telephone company in the international market, MCI conquered, on the last 10 years, 30% of USA international phone calls market.
MCI WorldCom: new horizons - Having finished the fusion process with WorldCom, now on its final phase, MCI will change its name to MCI WorldCom and will widen considerably its horizons as a service supplier. It will be the second largest long-distance telephone company in the United States, with 25% of market share, and will start operations with one of the strongest commercial client base and more than 22 million small companies and private residential end users.
MCI WorldCom will be a solidly positioned company ready to accelerate the beginning of competition in US local market, estimated on US$ 100 billions. With offices in 65 countries, MCI WorldCom will be the second largest international voice traffic telephone company in the world. The merger between WorldCom -- with its pan-european network and its presence expansion focused upon Asia -- and MCI, with joint ventures and alliances in North and South America, including Avantel in Mexico, Stentor in Canada and Telefónica in Latin America, MCI WorldCom will assume the position of a powerful and influent competitor on the global telecommunications market, estimated on US$ 670 billions.
The resulting company after the merger will join WorldCom's and MCI's experiences on Internet to create one of the pioneer Internet service providers in the world, with more than two thousand presence points. The advanced data/Internet services company's portfolio will include Web access, development and hosting, Intranet applications and virtual high speed frame relay data services.
MCI WorldCom's forecast for 1998 is that the company's revenue will be US$ 32 billions, with 22 million clients, 70 thousand employees, points of presence in more than 300 countries, local area network installations in 102 north-american markets and a 25% long-distance telephony market share.
Embratel MCI WorldCom: no frontiers - The three companies merger represents for Brazilian and Latin American communications the start of a new age, in which telecommunications globalization plays a major roll, with high technological and service quality standards.
Embratel, having the largest telecommunications network in Latin America, and besides the fact of being the only withholder of a national optical fiber national network in Brazil and having the best response company on telecommunication services in the country, offers, both nationally and internationally, various services encompassing long-distance telephony, data communications, telecomputing, text communication, television and radio signal transmission, as well as maritime communications. Regarding Internet, Embratel has the largest backbone in Latin America and detains more than 80% of brazilian market.
In order to supply these services, the Company disposes of approximately 24 thousand kilometers of microwave links (100% digital); four domestic communication satellites and more than 80 earth stations that make up, in the whole country, its satellite telecommunication segment. Embratel is also implanting a national optical fiber network (Rede Nacional de Fibras Ópticas), connecting the main capital cities, from Fortaleza (in Ceará state, northwest of Brazil) to Porto Alegre (in Rio Grande do Sul state, south of Brazil), just totalizing 9,300 kilometers in extension.
Regarding its international participation, Embratel makes part Intelsat and Inmarsat organizations, which operate international communication satellites. For international telecommunication traffic services, Embratel counts on three optical fiber submarine cable systems -- UNISUR, AMERICAS 1 and COLUMBUS II -- interconnecting Brazil to the other Mercosur countries, as well as to United States, Europe and Asia. Through UNISUR, Sintonia Project was created, interlinking south american countries via an integrated digital network, dynamizing communications and business flow among Brazil, Argentina, Chile, Uruguay and other Mercosur countries.
It is planned for 1999 the activation of ATLANTIS 2 optical cable, connecting South America (Fortaleza, in Brazil and Las Toninas, in Argentina) to Africa (Dakar, in Senegal, and Cabo Verde) and to Europe (Sesimbra, in Portugal, and Canaries Islands, Spain), with 12 thousand kilometers long and 60 thousand voice circuits. To implant this system, Embratel is joining an international consortium integrated by nine telecommunication companies that will invest US$ 300 millions. ATLANTIS 2 will be connected to AMERICAS 1, COLUMBUS II, UNISUR, SEA - ME - WE 3 (access to Italy and Southwest Asia), PENCAN 6 (Spain) and TAGIDE 2 (France) systems, forming an optical fiber ring on the Atlantic Ocean region.
In the area of maritime communications, Embratel has a mobile service with 39 coastal stations, besides using Inmarsat organization satellites for mobile communications services reaching users located on land, sea or airborne.
Embratel counts on 9,800 employees, of which 19% have superior education degree. Based on Rio de Janeiro, make part of Embratel's Board, the President and the Services, International, Engineering, Administration and Economic-Finances Directors.
In 1997, Embratel invested R$ 875 millions (of which 95% from its own resources and the rest 5% through financed acquisitions) on its services expansion and on the effort to incorporate to its systems the most modern technologies existent in the world, in the areas of telecommunications and telecomputing. In 1996, the investments amounted around R$ 850 millions. For the year of 1998, forecasts indicate investments of around R$ 1 billion.
In 1997, Embratel's priorities were the construction of Brasilsat B3 and the expansion of the national optical fiber network (Rede Nacional de Fibras Ópticas), which expansion started this year. Until 1999, it will add up 14,800 new optical routes to the existing network. Also for 1999 it is planned the launching of Brasilsat B4, which construction and launching were authorized by Ministry of Communications, with a cost of US$ 150 millions.
Optical Fiber - One of the great advantages of the optical fiber systems being installed by Embratel is that their initial capacity of 123 thousand simultaneous connections can be increased to 600 thousand, only requiring the installation of two multiplexing devices.
The use of optical fiber technology facilitates high speed data transmission and makes possible the use of new services, due to a higher transmission capacity.
As an example, we can cite the generalized use of high definition television, which depends on a reliable optical fiber network. With the optical fiber connections, there will be a significant increase on Embratel's basic network performance, due to a biggest transmission capability enabling it to absorb unexpected demand variations, assuring a prompt response to clients needs.
Satellites - Following Embratel's second generation domestic communications satellite program, Brasilsat B1 was launched on February 28th 1994 and Brasilsat B2 on March, 28th 1995. The advent of these two new satellites increased the national service coverage previously based exclusively upon Brasilsat A1 and A2. Besides that, the brazilian satellite telecommunication system (Sistema Brasileiro de Telecomunicações por Satélite) became able to serve Mercosur countries, thanks to the widest coverage provided by the new generation of Brasilsat satellites. Nowadays, the brazilian satellite telecommunication system counts on four satellites (A2, B1, B2 and B3 - B1 satellite was rented from north-american company Hughes). Brasilsat B3 was launched on February 4th, this year. And Brasilsat B4 will be launched at the end of 1999.
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