Algar Telecom Leste (ATL)

Active

Prospective

Algar Telecom Leste (ATL), or Companhia de Telecomunicacoes ASQ, was awarded a 15-year concession to provide cellular phone services through the B (800s MHz) band in area 3 in April 1998. The area 3 comprised the states of Rio de Janeiro and Espirito Santo. The Brazilian telecommunications market was divided in 10 areas in 1996 in order to assign licenses for cellular phone services. In each area, the B band was assigned to a private consortium through a competitive bidding and the A band was assigned to the state owned company that provided local fixed phone services in the concession area. Tele Sudeste Celular, the state-owned competitor of ATL, was privatized in July 1998. ATL won its license through a competitive bidding when it offered US$ 1,334.9 million (R$1,509 million) for the license in April 1997 (in order to calculate the real value of the licence fee payments, we used a discount rate of 12.7% aa, which is the rate used by the regulatory agency Anatel). The concession contract was signed in March 1998 when the consortium paid 40% of their offering. The 60% remaining has to be paid in three equal installments during the first three years of the concession contract. The winning consortium comprised Lightel SA (51% of the voting capital), Queiroz Galvao (29%) and Korea Mobile Telecomunications (20%). In July 1999, the consortium was comprising Lightel SA (51% of the voting capital), a subsidiary of Korea Mobile Telecommunications, SKTI-US LLC (30%), and a subsidiary of Williams International Telecom Limited, JOHI (19%). By the end of 2000, ATL was controlled by Lightel (Grupo Algar), SBC International (which had acquired the SKTI-US' stake in ATL), and Williams International Telecom. In 2001, Williams International Telecom sold its stake (19% of the voting capital and 50% of the total capital) to Telmex. In addition to Telmex, ATL was controlled by Algar Novaco, a company controlled by Lightel (61%) and SBC International (39%), with 51% of the voting capital of ATL, and SBC International, a joint venture between Telmex and SBC, with 30% of the voting capital of ATL. In 2003, the corporate control of ATL was acquired by Telecom Americas, a subsidiary of America Movil. Telecom Americas bought the stakes of Lightel and SBC International. Since August 2003, ATL and all mobile operations of Telecom Americas in Brazil are operating under the brand name "Claro". America Movil has grouped it's Brazilian operating companies (ATL, Tess, BCP, BSE, Claro Digital, and Americel) under this group. From 2004 all information is recorded under BCP (Claro). The company signed a US$ 200 million turnkey contract with Ericsson to develop its network in 1998. In November of 2000, ATL opened a credit line of US$ 270 million (R$ 527.8 million) with BNDES (the brazilan national bank for development) to keep its investment schedule. ATL received the first part of the loan, US$ 221 million (R$ 431.6 million), on November/2000. The remaining of the loan, US$ 39 million, was received during 2001. None

Information and communication technology (ICT)

World Bank Group

Project

Telecommunications, Government, Manufacturing (Industrial)