april 2002 - oi 2002. 2 this presentation ... band a: tele centro oeste celular band b: americel...
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This presentation contains forward-looking statements. Such statements are not statements of historical fact, and reflect the beliefs and expectations of the Company's management. The words "anticipates," "believes," "estimates," "expects," "forecasts," "intends," "plans," "predicts," "projects" and "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Accordingly, the actual results of operations of the Company may be different from the Company's current expectations, and the reader should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update them in light of new information or future developments.
4
Entrepreneur
– Fiercer competition through new local and long distance licenses
– 1962 – CBT – 1965 – Creation of
Embratel– 1972 – Creation of
Telebrás– 1995 –
Constitutional amendment
– 1996 – Minimum Law
– 1997 – Preliminary phase of LGT
– 1998: Privatization ofTelebrás
– 1999: Mirror licenses of Telesp, Telemar, Brasil Telecom andEmbratel
State Monopoly (1962-1997)
Free Competition - 2002
Regulator
PrivatizationLimited Competition
1998 - 2001
Context
Role of State
Historical Background
5
Planning and implementation
of the PRIVATIZATION process.
++
++
Universalization
Competition
Privatization
Creation of ANATEL
E. Maximize the sale value of telecommunications assets without jeopardizing the other objectives.
D. Create conditions for an harmonic growth of the sector in line with the social role of the
Gov’t.
C. In a competitive environment, create attractive investment opportunities as well as
encourage technological and industrial development.
B. Broad and improve the range of telecommunications services.
A. Strength the regulatory role of the Gov’t and and forego its role as entrepreneur.
ORIGINAL OBJECTIVES OF THE REFORMORIGINAL OBJECTIVES OF THE REFORM BASIC GUIDELINESBASIC GUIDELINES
The Brazilian Model
6
Fixed Telephony
Region II: Mid-SouthConcession: Brasil Telecom Mirror: Global Village Telecom
Region I: North-EastConcession: Tele Norte LesteMirror: Vésper S.A.
Region III: São PauloConcession: TelefônicaMirror: Vésper SP
Nationwide (Long Distance)Concession: EmbratelMirror: Intelig
7
Mobile Telephony
Area 5: South
Area 7: Mid-West
Area 8: North
Areas 1/2: São Paulo
Band A: Tele Centro Oeste CelularBand B: AmericelBand D: TIM
Band A: Telesp CelularBand B: BCP and TESSBand D: TIM
Band A: Amazônia CelularBand B: Norte Brasil TelecomBand D: TNL - PCSBand E: TIM
Band A: TIM Sul, Sercomtel CelularBand B: Global Telecom
Area 10: NortheastBand A: TIM NordesteBand B: BCPBand D: TNL-PCS
Area 6: Rio Grande do Sul
Area 4: Minas Gerais
Area 9: East
Area 3: Southeast
Band A: Telefônica CelularBand B: Maxitel (TIM)Band D: TNL-PCS
Band A: Telemig CelularBand B: Maxitel (TIM)Band D: TNL-PCS
Band A: Telefônica CelularBand B: ATLBand D: TNL-PCSBand E: TIM
Band A: Celular CRT Band B: TeletBand D: TIM
8
In million
Source: Up to 2001: Actual numbers
2005: PASTE 2000
The Brazilian Telecom Market
0.2 0.8 1.20.4 0.8
28.7
13.3
48.0
16.5
5.6
58.0 58.0
1994 2001 2005
Paging Pay TV Mobile Fixed
9
Fixed Plant� Fixed telephony subscribers in Brazil (in million)
14.818.3
38.3
48.0
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
1998 1999 2000 2001
10
Mobile Plant� Mobile subscribers in Brazil (in million)
2.7
7.2
23.2
28.7
-
5.0
10.0
15.0
20.0
25.0
30.0
1998 1999 2000 2001
11
Public Telephony� Public telephones in service (in thousand)
548597
803
1,271 1,259
-
200
400
600
800
1,000
1,200
1,400
1998 1999 2000 2001 2002 Paste
12
Operational investments in the sector*
2000199819971996
15.8
12.1
7.67.44.3
2.2
20011999
17.6
24.7
0.4 1.20.70.7 1.61.5
* R$ billion
Investments in the privatization auction and mobile bands*
1995
0,22,9
26,5
3,8
200019981997 20011999
0
Privatization: Jul/1998
Share in GDP %
Investments
13
� New authorizations
� Companies that have anticipated Anatel targets
� PCS
� Relevant issues
� Bad debt
� Cross subsidies
� Interconnection tariffs
� Tariffs
� Tax burden
Current Scenario
14
� Revision of Concession Contracts
� Public Hearing until Dec. 31, 2002
� Express interest in postponement to Anatel
until Jun. 30, 2003.
� Rules for mergers and acquisitions
� Anatel and the market
Outlook
15
Brasil Telecom’s NetworkCurrent Scenario and Outlook
Francisco Aurélio SantiagoGoal Compliance Director
16
Scenario
� Greater speed and information volume demand (broadband).
� Quality/cost/term as key factors in choosing service
provider.
� Increasing competition.
� Acquisition/mergers.
17
Guidelines
� Focus on meeting the needs of corporate and business
clients.
� Define a strategy in terms of technological evolution,
with the objective of optimizing investment and
anticipating the offering of new services.
� Gear investments towards data communication and
intelligent network, always focusing on client loyalty and
increase service quality.
18
Current Scenario
� Circuit switching networks focused on supplying voice
and some low-speed data transmission.
� Accesses mostly of metal cables, which support voice
and medium-speed (xDSL) data services; radio access
(2%); fiber access (5%).
� Data communication networks to support dedicated
accesses and IP services.
19
Telecom Data
2001 2002 Var.
2002/2001
Population (Million) 40.2 41.1 2.0%
Lines Installed (Thosuand) 10,015 10,340 3.2%
Teledesidade (Term/100 Habts.) 21.5 25.2 3.7 p.p.
Lines in Service (Thosuand) 8,638 9,198 6.5%
Utilization Rate (%) 86% 89% 2.7 p.p.
Digitization Rate (%) 97% 98% 1.2%
Public Telephones (Thousand) 285.7 312.2 9.3%
20
Teledensity vs GDP (2001)
1
10
100
100 1000 10000 100000
DF
GO
SC
RS
PR
AC
MS
TO
RO
BRASIL
DEU
JPN
ITAURY
LUX
FRA
PRT
CHL
ARG
MEX
PAK
IND
PER
TELEDENSIDADExPIB 2001 OPERADORAS BRASIL TELECOM
TELEDENSIDADE
PIB PERCAPITA US$
USA
IDN
PHL
MAR
SYR
VEN
SAU
TUN
EGY
SWEDNK
AUT
NOR
ESP
CAN
MT
Source: IBGE and Brasil Telecom
21
Access
2001 2002 Var.
Thous. Thous. 2002/2001
Lines Installed 10,015 10,340 3.2%
Data Communication1 176.4 270.5 53.4%
Value-Added Network2 1,402.4 1,986.6 41.7%1 ADSL, Dialnet, DT Network, Frame Relay, ATM and IP2 SPM, UMS, CNG, ICW, CPP, TFPP, Personal number
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Outlook
� Priority: expand data communication.
� NGN: voice convergence, data and image into a single
network.
� Expand network for value-added services, such as
intelligent network and messaging services.
� Increase opticalization of network access, targeting
broadband services.
23
Brasil Telecom’s Backbone
Porto Alegre RS
Florianópolis
Goiânia
CriciúmaTubarão
Campo Grande
Rondonópolis
Rio Branco
SC
GO
MS
MTAC
Porto
Velh
o
RO
Palmas TO
ANEL 109Interconexão
do RS com SC
ANEL 105Paraná
ANEL 400Curitiba e
interior do Paraná
ANEL 104Noroeste do Paraná
ANEL 103Mato Grosso do Sul
ANEL 102Goiânia
ANEL 101Goiás BRASÍLIA
Cabo de Fibra Óptica
Cuiabá
MT
Curitiba PR
Morrinhos GO
DF
Lages SCSC
LondrinaPR
Cross ConnectsADM-4
ADM-16
24
Qu
ality
Ind
icato
rs (Ou
t of 3
5)
33
32
32
34
34
34
34
35
34
34
35
35
33
33
-
5
10
15
20
25
30
35
jan/01
feb/01
mar/01
apr/01
may/01
jun/01
jul/01
aug/01
sep/01
oct/01
nov/01
dec/01
jan/02
feb/02
25
Universalization Targets - 2001UNIVERSALIZATION INDICATORS
MONITORED BY ANATELGOAL/ YEAR
CRT CTMR TELESC TELEPAR TELEMS TELEMAT TELERON TELEACRE TELEGOIAS TELEBRASILIA BRT
Localities that have less than 50% of publicphones able to make and receive local andLD calls, installed in locals with 24-houraccess
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Localities that have less than 25% of publicphones able to make and receive local andLD and ILD calls, installed in locals with 24-hour access
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Municipality served by STFC, withindividual access, with public telephones atno further than 800 meters
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Localities with less than 3 public telephones per 1,000 inhabitants distributed evenly
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Localities with over 1,000 inhabitants,without STFC, with at least um publictelephone accessible 24-hours capable ofmaking and receiving local, LD ILD calls
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Requests for a public telephone in schoolsand hospitals met in more than 4 weeks
0 begin. Dec/31/0
00 0 0 0 0 0 0 0 0 0 0
Requests for a public telephone made bythe hearing impaired and in wheelchair met in more than 4 weeks
0 begin. Dec/31/0
00 0 0 0 0 0 0 0 0 0 0
Requests for a line met in more than weekin schools and hospitals
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Requests for a line made by the hearingand speaking impairred met in more tha 6weeks
0 begin. Dec/31/0
00 0 0 0 0 0 0 0 0 0 0
Localities served only with public access,without at least 1 public telephoneaccessible 24 hours capable of making andreceiving DLD and ILD calls
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
Localities that have no 2% of all publictelephones adapted to the hearing andspeaking impaired as well as in wheelchair
0 begin. Dec/31/9
90 0 0 0 0 0 0 0 0 0 0
26
Corporate Market and Data Products
Yon Moreira da SilvaCorporate Business Director
Manuel Ribeiro FilhoSuperintendent Director
27
Vant Acquisition - I
* Authorization to offer Corporate Network Service (CNS) throughout the country
* Specialized in data transmission and corporate, retail and Internet solutions
* IP backbone and over 2,100 ports in service in Region II
* 17 points of presence in São Paulo, Rio de Janeiro, BeloHorizonte, Vitória, Salvador, Recife and Fortaleza
* http://www.vant.com.br
� 19.9% of Vant Telecomunicações S.A.’s total capital
� Company Characteristics:
28
Vant Acquisition - II
� Benefits for Brasil Telecom:
* To consolidate participation in data communication market
* To strengthen and to increase position in Region II
* Presence in Regions I and III through operating agreements
* Expertise in IP – highly qualified team
* Operational learning as CLEC (Competitive Local Exchange Carrier)
29
BrT Serviços de Internet S.A.
� BrTurbo.com gained, in 3 months, 35% of market share in BrasilTelecom’s concession area
� Partnership with Microsoft that targets the corporate market by offering Office XP software on-line
� Fully-owned subsidiary
� Launch of BrTurbo.com portal
� Partnership with Ibest, with call option
30
Product Launches - I
� BrTurbo.com portal launched October 2001
� Targets Internet broadband users
� Multiplayer on-line games,videos, sports and social events, live and recorded
� Offers personal backup of 1 Gigabyte per user and 3D chat
� 24/7 exclusive live transmission of reality show Big Brother Brasil
� Approximately 25,000 subscribers
� Second largest provider of Internet turbo adsl
31
Product Launches - II
� Free Mail Boxes
* As of January 2002, Brasil Telecom’s clients have access to 32 million free mail boxes on the Internet
* Allows to send and to receive messages from Internet-accessed computers
* Offers 10Mb of free space to allow the exchange of large files
32
Product Launches - III
� Launched in March 2001
� Available in 18 cities
� 24-hour broadband access, 30x faster than regular modem connection
� Promotional installation fee of R$ 60
� Promotional leasing modem fee of R$ 14.90/month
Package Downstream Upstream Monthly fee
Fast Up to 256 Kbps Up to 128 Kbps R$ 59.00
Super-Fast Up to 512 Kbps Up to 128 Kbps R$ 175.00
33
Product Launches - IV
� By 1Q02, over 54 thousand adsl connections had been installed
54,812
34,378
21,735
6,799
14,84617,207
25,756
40,640
65,067
8,326
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1Q01 2Q01 3Q01 4Q01 1Q02
Installed Sold
34
Product Launches - V
* Launched November 2001
* Promotional installation fee of R$250
* Promotional leasing modem fee of R$30/month
Package Downstream Upstream Monthly fee
Rápido Up to 256 Kbps Up to 128 Kbps R$ 199.00
Super Rápido Up to 768 Kbps Up to 128 Kbps R$ 409.00
Profissional Up to 1.5 Mbps Up to 256 Kbps R$ 890.00
35
Product Launches - VI
� Launched in December 2001
� Curitiba, Porto Alegre and Brasília
� Operates uninterruptedly 365 days per year
� Hosting services, collocation, data storage and connectivity
� Infrastructure with physical and logical security, no-break, generator groups, acclimatization, access control and backup
� Redundant systems integrated with Brasil Telecom’s backbone
36
Product Launches - VII
� Based on ADSL technology.
� VPN Simples was launched nationwide. Outside Region II, clients should contract a connection through their local operator (this connection should have at least 1 valid IP).
� Major characteristics of this architecture:
� Connection speed and safety in exchanging files
� One terminal per point (internal network required)
� Use of a regular modem bridge
� Presence of a shared VPN server
� Include integrated redundant systems to Brasil Telecom’s backbone
� http://www.vpnsimples.com.br
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