UPDATE 1-Soros-backed telecom venture to invest over $200 mln in Brazil

martes 6 de agosto de 2013 22:59 CEST
 

* On Telecom offers 4G wireless broadband in homes, offices

* Company eyes more funding options as more licenses issued

By Brad Haynes

SAO PAULO, Aug 6 (Reuters) - A new Brazilian telecommunications company backed by billionaire financier George Soros plans to invest at least 500 million reais (US$218 million) over the next three years, executives said on Tuesday, ramping up competition among Internet providers in a cooling market.

A fund run by Soros is set to invest at least $150 million, giving him a majority stake in On Telecom, which offers home and office connections over fourth-generation (4G) cellular networks, Chief Executive Officer Fares Nassar said at a news conference.

The technology is aimed at markets with little or no broadband cable coverage, exploiting a lack of fixed-line investments in many regions. By the same token, Brazil's mobile phone market exploded over the past decade as cellphones became a first telephone line for millions of remote households.

On Telecom is launching in the state of São Paulo, Brazil's most populous, but Nassar said it could soon expand into other regions as the government sells new 4G licenses. He said that would require additional funds from Soros, new investors, or an initial public offering.

"Given that we have aggressive growth plans, an IPO or new partners could be the best way to capitalize and finance those new expansions," Nassar told reporters in São Paulo.

The upstart company is targeting a niche in Brazil's market exploited in recent years by broadband operator GVT SA, which offers specialized broadband services in regions and business segments underserved by bigger companies. GVT has expanded rapidly in markets not dominated by large phone companies, allowing it to charge slightly higher rates for Internet services.   Continuación...