WCA November 2009

GVT has a 4% share of the Brazilian market, with 2.3 million customers and revenue of $800 million in 2008. In offering a 15.8% premium over GVT’s share price Vivendi clearly signalled it is in earnest, but some analysts did not rule out a counterbid, noting that Telefónica might be interested in expanding its 31% market share in Brazil. Telefónica shares control of Vivo, Brazil’s number 1 wireless carrier, with Portugal Telecom. The Spanish company also owns Telesp, Brazil’s number 2 fixed-line ’phone company, which operates in São Paulo state. In other news of Telefónica, the ✆ ✆ former Spanish ’phone monopoly and China Unicom said 6 th Sept- ember in Beijing that they would each buy $1 billion worth of stock in the other to deepen a strategic alliance. Telefónica’s stake in China Unicom will increase to 8% from 5.4%, making the Spanish operator the largest single investor in one of the largest Chinese mobile operators. China Unicom will acquire a 0.88% stake in Telefónica. Together, the two companies have about 550 million customers. They said they will jointly buy infrastructure and equipment and develop wireless service platforms and services for multinational companies. The agreement would also extend to network roaming and the sharing of technical research. Telefónica has invested in the Chinese telecommunications market since 2005, when it bought a 2.99% stake – later raised to 5.4% – in China Netcom, an operator that was merged into China Unicom in 2008. Alcatel-Lucent announced on 3 ✆ ✆ rd September that it has strengthened its working relationship with Tele- comunicações de Moçambique, the state-owned telecommunications company, with the signing of a $30 million contract to deploy the third phase of the Mozambican national transmission network. The French-American telecom recently finished the two first phases, laying 1,845 miles of optical fibre across Mozambique. The third stage will give the country a fibre optic interface with landlocked neighbours.

In emerging markets, carriers want to turn over their network operations so they can focus on growth” – branding, marketing, and services. Elsewhere in telecom . . . A proposal being considered by ✆ ✆ the Indian government calls for the establishment of the Telecom Testing and Security Certification Center, with functions similar to those exercised by the China Information Technology Certific- ation Center. According to the website of the South China Morning Post , SCMP.com (2 nd September), the new agency, under the jurisdiction of India’s Department of Telecom (DoT), would require all foreign equipment suppliers to register with the DoT, agree to be monitored by security agencies, and obtain clearance from the Home Affairs ministry. The DoT solution is an apparent compromise intended to satisfy two sets of concerns. Indian security agencies want foreign suppliers banned from providing gear for networks in all but eight Indian states, but an initial demand that domestic telecoms supply and maintain their networks on their own was dropped when operators raised objections. As reported in the Economic Times (Mumbai) on 29 th August, “The government’s move to tightly regulate overseas suppliers of tele- com gear, especially the Chinese, due to security concerns has met with stiff opposition from Indian mobile phone firms, which fear such stringent measures will add substantially to their costs.” If its $2.9 billion bid for Brazil- ✆ ✆ ian telecom operator GVT is successful, the French tele- communications group Vivendi will become a direct rival of Telefónica of Spain in Latin America’s biggest market. Vivendi’s overture, on 10 th September, was seen as consistent with the acknowledged interest of the company’s chief executive, Jean-Bernard Lévy, in emerging markets. Vivendi said GVT’s controlling shareholders had agreed to sell it at least 20% of outstanding shares, but that its offer would go forward only if it obtained at least 51% of GVT’s capital.

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Wire & Cable ASIA – November/December 2009