Telesp Participacoes SA

Active

Prospective

Telesp Participacoes SA competes with Vesper Sao Paulo in the market for fixed local and long distance phone services in Sao Paulo. The was one of the three holding companies in which the 27 wireline companies of Telebras system were grouped for their privatization. The other two companies were Tele Centro Sul Paticipacoes SA and Tele Norte Leste Participacoes SA. The rest of Telebras system was divided into one long distance company (Embratel) and eight wireless (A-band) companies. Before its restructuration, Telebras system comprised of 27 state wireline companies, 26 state wireless (A-band) companies, and one long distance company (Embratel). Telesp Participacoes was created to own the equity participation of Telebras in Telecomunicacoes de Sao Paulo, Telesp, (71.4 percent). Telesp, in turn, controlled 56.2 percent of Companhia Telefonica da Borda do Campo (CTBC). Telesp provided local wireline phone services and intra-state long distance phone services within the state of Sao Paulo, while CTBC provided wireline phone service to ABC zone, a metropolitan area of Sao Paulo city. Its concession area had a total population of 33 million in 1998, while CTBC's had 3.4 million. Like the other eleven companies created from Telebras, Telesp Participacoes SA was fully privatized through an international competitive bidding in July 1998 when the Brazilian federal government sold its equity stake for $4,984 million (R$5,783 million) to a consortium led by Telefonica International Holdings composed of Telefonica Internacional (69.04%), Portugal Telecom (19.85%), PTelecom Brasil (3.15%), Iberdrola Investimentos (6.99%), Banco Bilbao Vizcaya (.95%) and others (.02). Telesp Participacoes was sold with a premium of 64.3 percent over the minimum set by Brazilian government. The winning consortium paid 40 percent of its offering on August 3, 1998. The remaining 60 percent would be paid in two equal annual installments which would be adjusted according to the CPI plus a 12 percent annual interest. Telesp Participacoes committed to increase the fixed line network of Telesp and CTCB from 6.01 million lines in February 1998 to 7.84 million by December 1999, to 9.2 million by December 2000, and to 10.68 million by December 2001. In addition, the company committed to increase the number of pay-phones from 169,5000 in March 1998 to 213,200 in December 1999, to 237,540 in December 2000, to 264,540 in December 2001. The company also had to compete with Embratel in the intra-regional long distance phone services since 1998. In 1999, Telesp also acquired 51.04% of Centrais Telefonicas de Ribeirao Preto(CETERP). The company invested around US$ 2,040 (R$ 4,080) million in 2000. Anatel would award unlimited licenses after January 1, 2002. As of December 2003, Telefonica Internacional had increased its direct and indirect stake in Telesp to 87.49%. As of December 2009 Telefonica's interest was 87.95%. In October 2011, Vivo Participacoes was incorporated by Telesp. The investment figures and number of connections in 2011 already reflected the merger. In June 2012, Vivo won the competitive bidding organized by the regulatory agency Anatel for one out of four licenses to provide 4G cellular services. Vivo's offer was of US$ 531.6 million (BRL 1050 million), and the contract was signed in 2012. In September 2014, Vivo won the competitive bidding organized by the regulatory agency Anatel for one out of eight licenses to provide 4G cellular services. Vivo's offer was of US$ 820.2 million (BRL 1928 million) for the concession rights, and the contract was signed in December 2014. Telesp had around 10.6 million of lines in service by end of 2000. In 2001 the total investments undertaken by the Telesp was $ 2,022.4 million (R$ 4,500 million). In 2002 the investments amount dropped drastically to $ 547.2 million (R$ 1,600 million).

Information and communication technology (ICT)

Brazil

High

World Bank Group

Project

Broadband, Government, Telecommunications, Manufacturing (Industrial)