SAO PAULO, Brazil-Brazilian fixed-line operator Embratel plans to acquire Brazilian wireless local loop carrier Vesper from Qualcomm Inc. The amount of the deal was not disclosed, however, analysts said Vesper is worth about $70 million, much less than the amount of money Qualcomm has invested in the wireless operator since it was founded in 1999.
Vesper’s operations include local services in 17 states. It has about 500,000 residential and small business clients, many of which are prepaid users. Vesper also has deployed EV-DO technology in Sao Paulo.
The letter of intent covers Embratel’s 100-percent acquisition of Vesper’s shares, and the acquisition will be free of debt and not require Embratel cash. Qualcomm and Vesper will enter a tower sale/leaseback arrangement to raise funds for the company.
Proceeds of the tower sale will be used to pay outstanding bank debt and fund short-term needs. Additional funding for Vesper for 2003 will be covered from a combined Embratel and Vesper operations and cash on hand.
Qualcomm decided to sell Vesper in April after Brazil’s telecom regulator Anatel denied the company’s request to offer full mobility services at 1900 MHz.
