Vesper Sao Paulo (merged with Embratel)

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Anatel awarded through a competitive bidding a fixed line telephony service license to Sao Paulo State to Vesper Sao Paulo (Vesper SP) in April 1999. The license allows to provide local and long distance phone services within the region. Vesper Sao Paulo won the license by offering the highest service coverage and US$ 41.7 million for the license (in order to calculate the real value of the license fee payments, we used a discount rate of 12.7% aa, which is the rate used by the regulatory agency Anatel). Vesper Sao Paulo has committed to providing services to 52% of Sao Paulo's cities with more than 200,000 by the end of 1999. The main owners of Vesper SP 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 S.A. Vesper SP competes in region III with Telesp and its sister company competes in the region with Telemar. In April 2000, the consortium announced the unification of management of the two regions (I and III). In November 2001, after a reestructuring process, Qualcomm became Vesper SP's controlling stakeholder. In 2003, Vesper SP and Vesper S.A. 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. By the end of 2000, Vesper SP 184,000 customers and Vesper SP had invested US$594 million (R$ 1,189) in its telecom business. In the following two years, 2001 and 2002, the company invested US$ 58.9 million (R$ 131.112 million) and US$ 4 million (R$ 11.6 million) respectively. None