Ericsson plans to acquire $1bn additional revenues
Ericsson, world’s largest telecoms gearmaker, expects to acquire over $1 billion in additional revenues over the next two years by executing a swing of managed services contracts from India for large telecom firms in Latin America.
Ericsson’s wholly-owned Indian arm, Ericsson India Global Services, is already managing telecom networks in the US, Europe, Africa and Middle East.
According to Amitabh Ray, Senior Vice-President, Ericsson India Global Services, although its global service centre in Mexico has a time zone advantage, the company is planning to leverage its pool of certified engineering resources besides cost-efficiencies in India to support telecom companies across Latin America.
He added that Ericsson’s global services centre in India will work closely with its counterpart in Mexico to address the huge opportunity that exists in the Latin American telecoms spectrum.
He did not disclose the names of telecom firms whose networks will be managed from India but stated that they could include fixed-line operator Telefonica Brazil, cable TV player CableTica, Costa Rica besides Mexican mobile phone companies Telcel and Telefonica Moviles.
Portugal Telecom hails Telefonica offer for Vivo as insufficient
www.WirelessFederation.com/news: Portugal Telecom has announced that 5.7 billion- euro ($7 billion) offered by Telefonica for its stake in their Brazilian joint venture is clearly insufficient. Earlier, the Portuguese company had described its holding in Vivo Participacoes SA, Brazil’s largest wireless operator as strategic and a fundamental growth pillar.
Spanish company’s offer for the stake was rejected by its board on May10 but the latest comment by the SGPS SA Chief Executive Officer Zeinal Bava suggest that the Lisbon-based company may be holding out for a better price.
Telefonica Chairman Cesar Alierta has been trying to merge Vivo with Telecomunicacoes de Sao Paulo SA, or Telesp, the Spanish company’s fixed-line unit in Brazil and for this purpose, it has been trying to gain control of it since at least 2006. Telefonica even threatened to curb Portugal Telecom’s ability to pay dividends, seeking to force it to the negotiating table.
Analysts also feel that Telefonica should raise its offer to 7.5 billion euros. Telefonica and Portugal Telecom jointly own Brasilcel, a holding company with a controlling stake in Vivo. In case the offer fails, Portugal Telecom’s ability to secure Vivo dividend payments via Brasilcel might be blocked by Telefonica.
Depending upon the performance by Vivo in 2009, Brasilcel is due to pay a dividend of €111m each to Telefonica and Portugal Telecom this year. Vivo had 30 percent of Brazil’s 179 million wireless subscriptions at the end of March and Vivo has driven revenue growth for Portugal Telecom as growth in Europe slows and competition increases at home.
Telefonica Brazilian fixed-line phone business, Telesp is also underperforming amid increased competition and the telco wants to improve its position by merging Vivo and Telesp so that it can secure €2.8bn of cost savings. Due to Portugal Telecom’s skepticism about the merger, Telefonica had to make an offer to buy the Portuguese company out of Vivo.
Telefonica Spain to invest USD2.77bn in Telefonica Brazil
www.WirelessFederation.com/news: BRL5 billion (USD2.77 billion) has been planned to be invested by Spanish telecoms giant Telefonica in Brazil in 2010 to improve both its fixed line and mobile telecoms services.
According to group’s head of Latin American operations Jose Maria Alvarez Pallete, Telefonica has invested a total of USD110 billion in the region since it entered the LatAm market in the 1990s.
BRL3.4 billion was invested in Brazil by the Spanish heavyweight last year and owns Telefonica Brazil (Telesp) and has joint control of the country’s largest mobile operator by subscribers, Vivo Participacoes
Telefonica aims better ties with Telesp & Vivo (Brazil)
www.WirelessFederation.com/news: In order to improve its weakening position in Brazil, Spanish telecoms behemoth Telefonica has reportedly expressed its desire to strengthen the relationship between its Brazilian fixed line unit Telefonica Brazil (Telesp) and Vivo Participacoes.
Vivo Participacoes is the Sao Paulo-based mobile operator it jointly owns with Portugal Telecom.
Earlier, the Brazilian unit was considered to be one of the most profitable zones for Telefonica but currently it is going through a very rough phase, struggling amid intense local competition. Telefonica has claimed to improve its trading position by seeking closer integration between Telesp and Vivo which in turn can generate improved cost savings.
No comment has yet been received from Telefonica and Portugal Telecom.
Telefonica Brazil to invest USD 1.9b
www.WirelessFederation.com/news: BRL 3.5 billion is planned to be invested by Telefonica in Brazil throughout this year. BRL 2.3 billion of the total amount will go to Telefonica’s Brazilian fixed-line operator, Telesp.
Telefonica’s other units in Brazil, including internet portal Terra, call centre services provider Atento and mobile phone company Vivo will receive the remaining CAPEX.
Telesp seeks details of probe by CVM in GVT takeover
www.WirelessFederation.com/news: The alleged irregularities in Vivendi of France’s takeover of local telco Global Village Telecom (GVT) has made Telesp to request information on the alleged irregularities from Brazil’s securities regulatory authorities. Soon after Vivendi launched its surprise takeover, the probe was started in November.
Possible infractions on call options held by Vivendi to acquire GVT shares have been interrogated by CVM.
According to Telesp, Telefonica’s Brazilian subsidiary, French group and financial agents linked to the GVT offer gave conflicting information and this prompted shareholders of the Brazilian company to sell their stock based on inaccurate assumptions.
