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April 7, 2008 |
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BRASIL TELECOM: Sees 57% Investments Increase This Year Brasil Telecom Participacoes SA's Investor Relations Director Paulo Narcelio Simaes Amaral said that the company expects investments to increase 57% to BRL2.2 billion in 2008, from BRL1.40 billion in 2007, Business News Americas reports. BNamericas relates that the increase in investments is due to the license acquisitions for IPTV and 3G services and the extension of wireless services to a broader client base. BNamericas notes that Brasil Telecom identified telecoms trends in 2008 as the substitution of fixed for mobile lines, increased broadband adoption, new technologies like 3G and WiMax, voice over Internet protocol, "erosion of business lines with the advent of triple and quadruple play (the convergence of services), and more content and services as SMS." According to BNamericas, Brasil Telecom must keep its current eight million clients by offering new services and extension of products to the lower income subscribers to fight the constant loss of fixed telephony clients. Brasil Telecom's Executive Technical Director Francisco Aurelio Sampaio Santiago commented to BNamericas, "Fixed telephony operations represent 70% of the company's revenues. We need to add new services to minimize the fall in adoption. We started offering the prepaid fixed telephony service with 50 credits costing BRL19.90, 100 credits, and 200 credits costing BRL40.90. We have 113,000 clients so far [in the prepaid system for low- income clients] and 43% of them had never had a fixed line and 57% were out of the fixed base for at least five months." BNamericas says that each credit lets the caller have certain amount of minutes, which varies depending on the type of the call. Brasil Telecom Expects mobile service clients to increase by 30% to 5.6 million this year, compared to last year, according to the report. Mr. Santiago told BNamericas that for broadband services, Brasil Telecom must add value and form partnerships with other firms to increase sales. "In order to increase our fixed broadband user base by 22% in 2008, we have made a deal with [Brazil's largest PC maker] Positivo [InformaĦtica] so their computers are offered together with our broadband service," Mr. Santiago commented to BNamericas. Mr. Santiago also told BNamericas that Brasil Telecom will slowly expand the fiber to the premise service (FTTx), which is expensive. "FTTx is three times more expensive than ADSL to buildings and seven times more expensive to homes," Mr. Santiago said. He further revealed that Brasil Telecom reportedly is also open to acquiring smaller telecoms firms. Brasil Telecom's net operational revenues are expected to grow 3.4% this year from BRL11.1 billion last year, and costs expected to increase 2.8% from BRL7.26 billion, BNamericas states. Headquartered in Brasilia, Brazil, Brasil Telecom Participacoes SA -- http://www.brasiltelecom.com.br -- is a holding company that conducts substantially all of its operations through its wholly owned subsidiary, Brasil Telecom SA. The fixed-line telecommunications services offered to the company's customers include local services, including all calls that originate and terminate within a single local area in the region, as well as installation, monthly subscription, measured services, public telephones and supplemental local services; intra-regional long-distance services, which include intrastate and interstate calls; interregional and international long-distance services; network services, including interconnection and leasing; data transmission services; wireless services, and other services. * * * To date, Brasil Telecom carries Moody's Investors Service's Ba1 senior unsecured and credit default swap ratings. |
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