In contrast with Telesp fixed-line, which is moving out of focus in this more stable phase of the market, Telemar is once again the star of the wireline segment on the São Paulo Stock Exchange (Bovespa). Because of its large volume of relatively unhedged debt in foreign currencies, Telemar?s perceived value increases as the Brazilian Real appreciates against the US Dollar. Investors tend to prefer the holding company (TMAR) to the operating company (TNLP). Among recent reasons for this preference is the rumor that the former plans to transfer control of wireless operator Oi to the latter, as it did previously with Pegasus. Not that Oi isn?t a profitable operation: it had 1.4 million subscribers at the end of 2002, far exceeding the expected half a million. The problem is heavy investment, which could depress the operating company?s cashflow.
Mobile services
