Brasil Telecom (BrT) is interested in acquiring PCS wireless licenses only for areas located in the region it covers as an ILEC and plans to bid up to 100% more than the minimum prices set by Anatel. This information comes from an inside source but hasn?t been officially confirmed. The press relations office of Opportunity, BrT?s controlling shareholder, said ?we don?t comment on rumors?. Anatel has set the following minimum prices for areas located within BrT?s region: Paraná and Santa Catarina 69.149 million reals; Rio Grande do Sul 47.528m reals; Acre, Goiás, Mato Grosso do Sul, Mato Grosso, Rondônia, Tocantins, Federal District 68.241m reals. Thus these areas must sell for a minimum of 184.918m reals. If BrT wins with a 100% premium, it will pay almost 370m reals (now about 93m US dollars). The board has yet to approve a bidding strategy, however. Although the pension funds (Previ, Petros and Telos) will probably oppose participation in the auction at all if it means paying such a high premium, they?re supposed to vote with Opportunity according to an agreement signed by all shareholders in Invitel, the holding company that indirectly controls BrT.
TIM
It?s worth recalling that if BrT acquires a controlling stake in a wireless operation, Telecom Italia won?t be able to recoup its own share in the ILEC because it already controls a license to operate wireless services nationwide through Telecom Italia Mobile (TIM). Opportunity has undertaken not to do anything that would prevent Telecom Italia?s return once the legal ban on wireline/wireless cross-ownership expires at the end of next year. The same law prevents ILECs from diversifying until they fulfill regulatory targets for universal access and quality. BrT hasn?t yet done so. It could solve this problem by going back on last year?s decision not to incur the heavy investment in network expansion and quality required to meet those targets. If so, the prime cost in capex will far be lower than a year ago, not least because of low capacity utilization at key equipment vendors.
