Americel (merged with BCP SA (Claro))

active

Americel was awarded a 15-year concession to provide cellular phone services through the B band (800s MHz) in area 7 in April 1997. The area 7 comprised the states of Goias, Tocantins, Acre, Rondonia, Mato Grosso, Mato Grosso do Sul, and Brasilia. 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 Centro Oeste Celular, the state-owned competitor of Americel, was privatized in July 1998. Americel won its license through a competitive bidding. It offered US$ 305 million (R$339 million) for the license in July 1997. Americel is a consortium led by Bell Canada International. The concession contract was signed in August 1997 when the consortium paid 40% of their offering. The 60% remaining has to be paid in three equal parts during the first three years of the concession contract. The company started its commercial operations in November 1997. In July 1998, the Brazilian development bank BNDES bought a 20% of Americel's preferred shares for R$58.38 million which was reported an increased in the capital. Americel entered into a long-term loan facility with BNDES aggregate borrowing capacity of US$ 105.6 million (R$190 million). This eight-year term loan facility was used to finance equipment manufactured in Brazil and was fully drawn as of December 31, 1999. In October of 2001 the consortium, through its subsidiary, BCI, acquired 51% stake in cell phone carriers Americel and Telet for US$ 315 million. At the end of 2001 BCI was controlled by Bell Canada International (80%) and Telecom Americas, which, in turn, was controlled by America Movil, SBC International and Bell Canada International. By the end of 2002, the consortium, through its subsidiary, BCI, was holding 99.99% of the voting capital of Americel. BCI, in its turn, was controlled by Bell Canada International (80%) and America Movil (20%). During 2002, America Movil became the controller of Telecom America (96%), by acquiring the stakes of SBC International and Bell Canada International what increased its stake in BCI to 20%. In 2003, America Movil, became the controller of Americel, by acquiring Bell Canada International's controlling stake in BCI. By the end of 2003 BCI and its subsidiaries were holding 99.99% of the voting capital of Americel. BNDESPar, the investment wing of the Brazilian development Bank, was holding 100% of the non-voting or preferred shares. Since August 2003, Americel and all the mobile operations of Telecom Americas 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). (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) 2003 investment figures were obtained by distributing America Movil's 2003 investment in facilities by the number of total subscribers for each project - thus 2003 investment is a proxy given other regional investment of America Movil. In 1999, Americel invested over US$ 53 million (R$100 million). In 2000, Americel invested again US$ 46.7 million (R$ 91 million), the company had 396.127 customers by end 2000. In the next two following years, 2001 and 2002, Americel invested US$ 40.4 million (R$ 90 million) and US$ 21.2 million (R$ 62 million) respectively. None