Vivo Participacoes SA (Vivo) (merged with Telesp Participacoes SA)

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Telesp Celular Participacoes SA (TCP) 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 are comprised of one long distance company (Embratel), seven wireless (A-band) companies, and three wireline companies. Before its restructuration, Telebras system was comprised of 27 state wireline companies, 26 state wireless (A-band) companies, and one long distance company (Embratel). Telesp Celular Participacoes SA was created to own the equity participation of Telebras in the operational company Telesp Celular (71.4 percent) in 1998. Telesp Celular provided cellular mobile telephone services to the state of Sao Paulo through A-band (800s MHz). Like the other eleven companies created from Telebras, Telesp Celular Participacoes SA was fully privatized through an international competitive bidding in July 1998 when the Brazilian federal government sold its equity participation for US$ 3,092 million (R$3,588 million) to a consortium led by Portugal Telecom. Telesp Celular Participacoes SA and its subsidiary Telesp Celular were sold with a premium of 226.2 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. The concession area of Telesp Celular comprised of areas 1 and 2 of the cellular market. The Brazilian market was divided in 10 areas in 1996 in order to assign licenses for cellular phone services. In each area, A-band was assigned to the state owned companies that provided local fixed phone services in the area, while B-band was awarded to a private consortium through a competitive bidding. Telesp Celular had 4.3 million subscribers in its concession area by December 2000. Just after the privatization, Telesp Celular competed with BCP in the area 1 and with Tess in the area 2. In 2000, Portugal Telecom upped its stake in Telesp Celular to 41.2%, through an exchange of shares between Telefonica and Portugal Telecom. The exchange eliminated the crossed interests of Telefonica in Telesp Celular (mobile operator) and of Portugal Telecom in Telesp (wireline operator). In the same year, Telesp Celular acquired 100% of the total capital of Ceterp Celular from Centrais Telefonicas de Ribeirao Preto. After the transaction, Ceterp Celular was merged into Telesp Celular and ceased to exist. Then, Telesp Celular started operating in the whole state of Sao Paulo. In December 2002, the controlling stake of Telesp Celular was transfered from Portugal Telecom to Brasilcel, a 50/50 joint venture of Portugal Telecom and Telefonica Moviles to manage all their mobile operations in Brazil. At the time of the transaction, Telesp Celular Participacoes had a controlling stake in three companies: Telesp Celular, Global Telecom and Tele Centro Oeste (TCO). In December 2002 and February 2003, the companies that belong to the group converted their concession contracts into authorizations without termination date. In 2003, after having acquired shares of holding companies and promoted a corporate reestructuring, TCP became the direct owner of 100% of the total capital of Global Telecom. Since April 2003, Telesp Celular and all the operating companies participating in the joint venture have been operating under the brand name "Vivo". As of December 2005, the companies opearting under the brand "Vivo" were in the process of merging into Telesp Celular Participacoes SA (TCP). 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". Vivo acquired Telemig in April 2008. The effects of the merger are reflected in 2008 figures. Also in 2008, In 2008, Vivo won the competitive bidding organized by the regulatory agency Anatel for 8 licenses to provide 3G services (Vivo's offers averaged 69% above the minimum price set by Anatel). The company was expected to implement the necessary investment to provide mobile services to at least 60% of the areas it bid for in an 8-year period. The company's bid represented a total payment of US$ 765 million (BRL 1201.2 million) to Anatel. In November 2009, the acquisition of Telemig Celular Participacoes S.A. and its extintion was approved by the regulatory agency Anatel. In December 2009, a request for the approval of the incorporation of Telemig Celular S.A. by Vivo was filed by the sponsors at Anatel. In December 2010, Vivo won the competitive bidding organized by the regulatory agency Anatel for 23 out of 46 licenses to provide 3G services to the states of Amazonas, Amapa, Para, Maranhao e Roraima. The bid represented a total payment of US$ 623.8 million (BRL 1018 million) to Anatel, and the contract was signed in April 2011. In October 2011, Telesp incorporated Vivo and the investment figures for 2011 were recorded consolidated in Telesp entry (ID# 1481). If GT's numbers are not to be consolidated in here for 2003-2004, then for TCP: 2003 100% 0 151.9 7495 Number of connections (thousands) 2004 100% 0 273 9211 Number of connections (thousands)