Francisco Padinha, CEO of Vivo, says the Portugal Telecom/Telefonica Moviles joint venture will invest around 1 billion Brazilian Reals (now about 345m US Dollars) in 2003 but won?t spend a penny on acquisitions. Coverage of areas in Minas Gerais and the Northeast (except Bahia and Sergipe) will be achieved by CDMA/GSM dual handsets, which he expects to be on the market by the end of the year. ?Our strategy has been to cover Rio de Janeiro, São Paulo and Brasília. Minas Gerais is important but not a priority,? he says.
The capex is allocated to overlaying CDMA on TCO?s and NBT?s TDMA networks, footprint expansion, and growing revenue from data service. Vivo aims to double revenue in the data segment year over year, Mr Padinha says. The aggregate revenue obtained from data service by the telcos now in Vivo (excluding TCO and NBT) totaled 90m BRL in 2002.
Francisco Padinha addressed a public hearing held in Brasilia on Wednesday, May 14, by the Consumer Affairs Committee of the lower house. He was insistently asked whether Vivo (Telefonica Celular, Telesp Celular, Global Telecom, TCO and NBT) will hinder competition in Brazil?s wireless segment. ?These companies haven?t been merged,? he explained. ?What we?ve done is merely to combine management. No region has lost a competitor. Given the intensity of competition in the segment, no wireless carrier can afford to neglect quality or charge very high prices.?
M&A
