Vesper SA (merged with Embratel)

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Anatel awarded through a competitive bidding a fixed line telephony service license to the Northeast Region (Region I) to Vesper S. A. in January 1999. The license allows to provide local and long distance phone services within region. Vesper S.A. won the license by offering the minimum price of US$ 42.3 million for the license (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). The main owners of Vesper S.A. were Bell Canada International (34.4%), WWL International (49.4%), and Qualcomm Inc. (16.2%). Bell Canada International is owned by BCE Inc. (80%) and SBC Communications Corp. (20%). This ownership structure was the same for Vesper SP. Vesper S.A. competes in the region with Telemar and its sister company competes in region III with Telesp. In April 2000, the consortium unified the management of the two regions (I and III). In November 2001, after a reestructuring process in which US$346 million was injected into Vesper, Qualcomm became Vesper's controlling stakeholder. In December 2002, Vesper won a public bid and acquired a license for mobile services (SMP) in the states of Minas Gerais, Alagoas, Ceara, Paraiba, Pernambuco, Piaui, and Rio Grande do Norte. In 2003, Vesper S.A. and Vesper SP were bought from Qualcomm by Embratel. In December 2003 100% of the holding company of Vesper was transfered to Embratel. The value of the contract was US$45 million. In January 2004, Vesper returned to ANEEL the licenses for mobile services operation (acquired in 2002). The number of connections includes both the connections that are not being serviced and also the wireless (WLL) access. Without these figures, the number of connections of Vesper would go down to 999 thousand customers. By the end of 2000, Vesper SA had 299,000 customers and Vesper S.A. had invested US$ 420 million (R$ 840) in its telecom business. In the next two following years, 2001 and 2002, the company invested $ 90.6 million (R$ 201.6 million) and $ 10 million (R$ 29.496 million) respectively. None