Embratel Participacoes SA (merged with BCP Claro)

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Embratel Participacoes SA competes with Intelig in the provision of long distance and international services. It was one of the 12 holding companies in which the assets of the state-owned Telebras were divided for their privatization. The rest 11 holding companies were eight wireless (A-band) companies and three wireline companies. Before its restructuring, Telebras system was comprised of 27 state wireline companies, 26 state wireless (A-band) companies, and one long distance company (Embratel). Embratel Participacoes SA was created as a holding company to own the equity participation of Telebras in Embratel (98.8 percent) in 1998. Embratel was the main supplier of national and international long distance telephone services in Brazil. The company also offers other services including data transmission via dedicated or computed circuits, satellite communications services, radio sound and image and text transmission services. Its network included 23,976 kms of microwave trunk and 439,227 KMs of fiber-optic, a satellite system and international under water cables. Like the other eleven companies created from Telebras, Embratel Participacoes SA was fully privatized through an international competitive bidding in July 1998 when the Brazilian federal government sold its equity stake for US$ 2,284 million (R$2650 million) to MCI. Embratel was sold with a premium of 47.2 percent over the minimum set by Brazilian government. The winning consortium paid 40 percent of its offering on August 3, 1998. The remaining 60 percent would be paid in two equal annual installments which would be adjusted according to the CPI plus a 12 percent annual interest. The net present value of this transation was US$ 1,850 million. Embratel was privatized with the license to provide international phone services as well as intra and inter regional long distance phone services. Anatel, the telecom regulatory agency, planned to award a license to mirror Embratel in November 1998. Since the privatization of Telebras system, Brazilian telecommunications entered in a transitional period which would last until December 2001. During this period, international and inter-regional long distance phone market would be a duopoly between Embratel and Intelig. Anatel would award unlimited licenses after January 1, 2002. In 2003, Embratel bought Vesper S.A. and Vesper SP from Qualcomm. In November 2003, the transaction was pre-approved by ANATEL, the Brazilian regulatory agency for the telecommunications sector. In December 2003, 100% of the holding company of Vesper S.A. and Vesper SP was transfered to Embratel. The value of the contract was US$45 million. The transaction has authorized Embratel to deliver local services in the Regions I and III, where the acquired companies operate. In November 2003, MCI put its stake (51.8% of the voting shares) in Embratel for sale. In December 2003, Telefonos de Mexico (Telmex) presented a bid for MCI's stake in Embratel. The transaction was finalized in 2004. As of December 2005, Telmex owned 72.3% of the total shares (96.3 of the voting shares) of Embratel. In December 2014, America Movil formalized the merger of Embratel and BCP Claro. From 2014 on, information updates were recorded at BCP Claro (ID 969). The company invested US$ 1.7 billion in 1999 and $ 700 million in 2000. It had by the end of 2000 more than 1,000,000 optic fiber cable kilometers. In 2001 Embratel invested $661 million. In the following year, 2002, Embratel invested $ 354 million (R$ 1,035 million). The total investments in 2003 - US$163(R$ 489 million) does not include Vesper S.A. and Vesper SP.