News

Brazils MMDS Winners Bid Selectively

5/02/1999 8:00 PM Eastern

Rio De Janeiro, Brazil -- The country's recent
wireless-cable-license winners have targeted cities in the northeast part of the country,
notably avoiding areas that are home to existing hardwire-cable operations.

Bidders concentrated their efforts mainly in Brazil's
northeastern state capitals of Aracaju, Joao Pessoa, Maceió, Salvador and Sao Luís,
where direct-to-home satellite services are the only form of pay TV.

No licenses were sold in large urban centers such as Belo
Horizonte, Brazil's third-largest city, because they are home to established
hardwire-cable operations.

Last week, Brazil's government telecommunications
agency, Anatel, sold 20 of the 32 wireless cable, or MMDS, licenses offered through public
bidding. It raised $7.94 million from the sale -- a 14.4 percent premium over the $6.94
million minimum price that it had set for that group of licenses.

No companies bid for the list of small and midsized towns
because they feared that those operations could not easily become profitable due to the
country's recession, market analysts said.

Acom Comunicaçoes S.A., which is controlled by investment
fund Hudson

Investment Holding Inc., purchased seven of the 20
licenses. Acom bought two licenses in last year's bidding, when a total of 29
concessions were granted.

Another big license buyer in this round was Bahiasat
Comunicaçoes Ltda., which won three licenses in Bahia state, adding to the two that it
purchased there last year.

Convergence Communications Inc. of Salt Lake City and
Bolivia-based Multivisión were the other international investors taking part in the
bidding. Convergence owns 21.25 percent of Teleserv S.A., which won a license in Aracaju,
while Multivisión owns 49 percent of Multilink Telecomunicaçoes Ltda., which purchased
licenses for Cuiabá and Campo Grande.

A total of 60 wireless-cable licenses have been awarded in
Brazil over the course of this decade, compared with some 164 hardwire-cable licenses that
have been awarded so far.

The country has about 2.58 million pay TV homes, 68 percent
of which subscribe to cable. A further 14 percent receive wireless cable, 14 percent
receive Ku-band DTH service and 4 percent are C-band satellite homes, according to local
media-research company PTS.

September