Tele Centro Oeste Celular Participacoes SA (TCO)

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Tele Centro Oeste Celular Participacoes SA (TCO) was one of the 12 holding companies in which the assets of the state-owned Telebras were divided for their privatization. The remaining 11 holding companies were comprised of one long distance company (Embratel), seven 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). In 1998, TCO was created as a holding company to own the equity participation of Telebras in six cellular mobile operators in the Midwest of Brazil. The subsidiaries of TCO were delivering services through A-band (800s Mhz) to the capital, Brasilia, and the states of Goias, Mato Grosso, Rondonia, Acre, and Mato Grosso do Sul (area 7). 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. Like the other eleven companies created from Telebras, TCO was fully privatized through an international competitive bidding in July 1998 when the Brazilian federal government sold its equity participation for US$ 379 million (R$440 million) to a consortium led by Splice do Brazil, a Brazilian telecom manufacturing company. TCO was sold with a premium of 91.3 percent over the minimum set by Brazilian government. The winning consortium paid 40 percent of its offering on August 3, 1998. The remaining 60 percent would be paid in two equal annual installments which would be adjusted according to the CPI plus a 12 percent annual interest. In November 1998, TCO, through a consortium called Tele Centro Oeste/Inepar, was awarded a 15-year concession to provide cellular phone services through the B band (800s MHz) in the states of Amazonas, Roraima, Amapa, Para and Maranhao (area 8). There was no minimum price required for the license, but the operator had committed to offer services to regional cities above 200,000 inhabitants within 12 months and for cities of 100,000-200,000 within 24 months. Tele Centro Oeste/Inepar committed to pay US$ 52 million (R$60.55 million) in license fees. Tele Centro Oeste/Inepar 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. In 1999, Tele Centro Oeste Participacoes acquired Inepar’s stake in Tele Centro Oeste/Inepar and changed the name of the consortium to Norte Brasil Telecom S.A. (NBT). Since then, NBT became one of the operating companies of TCO. In January 2003, Splice SA sold its controlling stake in TCO (61.10% of the voting capital) to Brasilcel, a 50/50 joint venture between Portugal Telecom and Telefonica created through a corporate restructuring in 2002 to manage all cellular operations in Brazil. As part of that corporate restructuring the control of TCO and its subsidiaries (five operating companies in area 7 and NBT in area 8) were transferred to Telesp Celular Participacoes (also subsidiary of Brasilcel) in april 2003. Since the acquisition, TCO and its subsidiaries have been operating under the brand name "Vivo". In December 2003,Telesp Celular Participacoes had increased its voting stake in TCO from 61.1% to 86.57%. As of December 2005, the companies opearting under the brand "Vivo" were in the process of merging into Telesp Celular Participacoes. Shareholder approval was still pending. On February 22, 2006, the respective shareholders’ meetings of Telesp Celular Participações SA (TCP), Tele Centro Oeste Celular Participações SA (TCO), Tele Sudeste Celular Participações SA (TSD), Tele Leste Celular Participações, SA (TBE) and Celular CRT Participações SA (CRTPart) approved (i) the merger of TCO in order to convert it into a wholly owned subsidiary of TCP and (ii) the merger of TSD, TBE and CRT Part into TCP. As of March 26, 2006, TCP was the sole surviving company of these mergers and subsequently changed its name to “VIVO Participacoes SA", project #1470. On February 22, 2006, the respective shareholders’ meetings of Telesp Celular Participações SA (TCP), Tele Centro Oeste Celular Participações SA (TCO), Tele Sudeste Celular Participações SA (TSD), Tele Leste Celular Participações, SA (TBE) and Celular CRT Participações SA (CRTPart) approved (i) the merger of TCO in order to convert it into a wholly owned subsidiary of TCP and (ii) the merger of TSD, TBE and CRT Part into TCP. As of March 26, 2006, TCP was the sole surviving company of these mergers and subsequently changed its name to “VIVO Participacoes SA". The number of connections does not include area 8, served by Norte Brasil Telecom (NBT).