Maxitel (merged TIM Celular)

Active

Prospective

Maxitel, previously known as Vicunha Telecomunicacoes, was awarded, through a competitive bidding process, a 15-year concession to provide cellular phone services through the B band (800s MHz) in area 9 in April 1997. The area 9 comprised the states of Bahia and Sergipe. The company was also awarded a 15-year concession to provide cellular phone services through the B band (800s MHz) in area 4 (the state of Minas Gerais) in April 1998. 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. The company committed to pay US$ 230 million (R$250 million) in license fees for the area 9 and US$ 460 million (R$520 million) for the area 4 (in order to calculate the real value of the licence fee payments, we used a discount rate of 12.7% a which is the rate used by the regulatory agency Anatel). Maxitel paid 40% of its license fees at the signature of the concession contract. The 60% remaining had to be paid in three equal installments during the first three years of the concession contract. The concession contract of the area 9 was signed in August 1997; while the contract of area 4 was signed in April 1998. In 2000, Telecom Italia Mobile (TIM), a group controlled by Stet International, acquired 19.43% and 18.53% of the shares owned by UGB and Vicunha respectively. Therefore, TIM's stake in Maxitel is 90% as of 2001. Maxitel launched its services in area 9 in March 1998 and in area 4 late 1998. Maxitel competed with the privatized cellular operator Tele Leste Celular in the area 9 and with privatized cellular operator Telemig and CTBC-Telecom in the area 4 by the end of 1999. In 2002, TIM Group acquired the remaining stake in Maxitel for complete control of the company. In 2004, Maxitel's corporate control was transfered from the group to Tim Celular SA, another subsidiary of TIM group in Brazil. After the transaction, Maxitel became part of Tim Celular. None None

Information and communication technology (ICT)

Brazil

High

World Bank Group

Project

Telecommunications, Manufacturing (Industrial), Government