As forecast, America Movil bought BCP São Paulo in US$ 625 million. The offer of the Mexican firm for BellSouth¿s unit included capital and debt. The operation, still pending approval from the regulator Anatel, eases entrance of Claro, the trademark of Telecom Americas, in the metro region of São Paulo. In March, America Movil had bought the unit BCP Nordeste (BSE) in US$ 200 million, from the same owners.
Telecom Americas, holding created by America Movil to connect Brazilian assets (Tess, Telet, Americel, ATL, and BCP Nordeste), announced investments for US$ 500 million in two years, to launch GSM before defining BCP¿s purchase. Claro will assume the 1.7 million clients of BCP, and will serve some 19.2 million inhabitants. The company has put up its stake in the Brazilian market from 18% to 23%, thus increasing its customer portfolio from 6.7 to 8.4 million. BCP São Paulo registered profits for US$ 200 million in the first six months of the year, as a consequence of customer base expansion and cost cuts. This has been the best performance since operations started, in 1998.
Telecom Americas will return the PCS license for 1800 MHz (E-band) held for Sao Pablo, for which it offered US$ 86 million. The said transfer may be imposed a fine of 10% of license values. However, the firm won’t be left without spectrum. Through BCP, it plans to buy portions of the C-band, never auctioned, but offered to operators on the A and B bands (800 MHz).
Band migration –including fines- may be cheaper for Telecom Americas than continuing with plans for the E-band. Besides, the said return may be key to get Telemar¿s support, as the latter has the option to enter BCP¿s capital. Thus, the arrival of Oi, Telemar¿s cell arm, in São Paulo will be easier, as it may get advantageous conditions in the E-band to be left by Telecom Americas. Instead, Claro may obtain greater coverage in Minas Gerais and north of the country through Oi¿s operations.
The agreement between Telecom Americas and Telemar is a tough blow to Telecom Italia Mobile (TIM) intentions, in its struggle for the greatest cell market in Latin America. Focusing on São Paulo, the Italian operator launched GSM services on 1800 MHz in October last year, six months after originally set, after overcoming legal barriers, as regards its stake in the fixed telephony firm Brasil Telecom. Now, through BCP, Telecom Americas is fighting with a company counting on a deployed network, positive numbers, and ARPU higher than market average. Besides, BCP¿s operation integration in Claro may occur through Tess, that offers services in the interior of São Paulo, so as to cut roaming costs in the state.
As from creation, America Movil has increased its stakes in companies and gained territory. Now, it is trying to harmonize networks under GSM/GPRS. In Argentina, last country where it entered with cells after acquiring CTI Movil, the firm will migrate the CDMA networks bought to the European standard.
The company will make investments of US$ 200 million, US$ 120 million of which will go to deploy a network with some 1,300 sites countrywide. The other US$ 80 million will be used to buy new terminals. The tender includes Alcatel, Ericsson, Nokia, and Siemens. The contract, the most important in the last two years, may be executed before year-end.
Besides, CTI Movil moved forward as regards the reorganization of it debt, at US$ 1.05 billion.
The company is just about to strike an agreement with 26.1% of creditors, added to the ones that already signed a payment proposal with the operator. The firm may total 75.8%, i.e., over the 66% requested for the out-of-court settlement agreement. Moreover, the firm posted earnings of US$ 136 million in the 1H, mainly boosted by peso revaluation compared to the dollar. Sales for the period amounted to US$ 116 million (facing US$ 139 million, adjusted to inflation, booked along the 1H 2002); meanwhile, operative earnings reached US$ 1.2 million. Last year, CTI reported net losses of US$ 712 million.