BRAZIL'S CELL PHONE MARKET BOOM OPEN TO FOREIGN INVESTORS
RIO DE JANEIRO, Brazil -- Brazil's population of 160 million whose cellular telephone usage exceeds that of US customers' by 2 times (average monthly bill in Brazil is US$150), has become an attractive investment opportunity for leading telecommunications companies around the world, now competing for the chance to enter Latin America's potentially lucrative and largest telecommunications market. Opening the cellular market to private and foreign funds is seen as a precursor to the country's privatization plans. When Brazil's state-run telephone company, Telecommunicacoes Brasileiras SA (Telebras) offered 55,000 new cellular lines to customers this past summer, they received over 1.4 million applications. Brazil still has more than 10 million customers waiting for land telephone lines. The country already has approx. 2 million cellular subscribers; but this number is expected to increase more than 7-fold, to 15 million, in the next five years. In an effort to upgrade the infrastructure and become a serious player in the international investment community, Brazil has opened its telephone industry to foreign investors and announced plans to auction off 10 regional cellular holdings on April 7th -- prices to total US$3.6 billion. Contenders for these concessions include telephone giants: from the US, AT&T, GTE, AirTouch Communications and the RBOCs as well as major contenders from Europe, Asia and Canada.
Brazil's penetration of land phone lines per 100 is only about 8, just half that of its neighbor, Argentina. As point of comparison, the US has 62 lines per 100 residents.
[Related news]
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EMERGING MARKETS ATTRACT FINANCIAL TRADERS
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FOREIGN VENTURES ARE BEST GROWTH PROSPECTS FOR ADVERTISERS |
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GLOBAL -- Global trading volume in emerging-market debt nearly doubled last year to US$5.3 trillion. Brazilian assets were again the most often traded instrument, representing 27% (US$1.44 trillion) of the volume; but sovereign eurobonds showed the greatest rise in volume, increasing more than 200%.
(Source: YOUR LINK HERE)
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NEW YORK, USA -- US advertising agencies are looking abroad for best growth prospects. According to Martin Sorrell, WPP Group Chief Executive, growth opportunities for multinational advertisers and their ad agencies are outside the U.S. In fact, Latin America now accounts for 20% of WPP's business.
Reader's Comments
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TAMPAX ADS BREAK TRADITION
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SMALL BUSINESS GROWTH MIRRORS US OPTIMISM
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USA -- Tambrands launched a $60 million globally customized campaign that breaks long-standing taboos in feminine hygiene advertising. The new Tampax effort from Foote, Cone & Belding, New York, will run in 20 countries. This campaign is designed to get all women to listen to their message, whether they are lifelong tampon users in America or brand new to the product category in Asia and Latin America. Tambrands is committed to growing its business through brand building, rather than short-term promotional tactics.
This aggressive move follows Tambrands plans, as reported last September, to adopt a single global structure and rationalizes production facilities to support its global growth strategy. Restructuring combined its domestic and international groups to eliminate administrative duplication, improve decision-making and get products to market more quickly and was intended to save the company $20 million a year in recurring savings -- to be fully phased in by the beginning of 1998.
The company maintains 45% of the worldwide tampon market and is sold in over 150 countries. Nevertheless, that market is fairly small because women of other countries have been reluctant to use tampons due to economic and cultural reasons. Only one in 15 menstruating women in the world currently uses tampons; pads have a 75% share of the US$8 billion global sanitary protection market.
(Source: YOUR LINK HERE)
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USA -- Small businesses represent the fastest growing sector of the US economy and owners are increasingly optimistic about the future. According to a recent Dun & Bradstreet study of small business owners, of which there are 42 million in the USA (19% are women, and 5% minorities), small business owners are significantly more optimistic about the US economic outlook than they were last year (approx. 75% in 1996 vs. 50% in 1995). Some of the biggest challenges faced by owners are:
- 49% -- finding qualified employees
- 44% -- handling increasing insurance costs
- 30% -- dealing with increasing domestic competition
Despite trouble finding qualified workers, only 35% of small businesses say they outsource. And only a minority turn to new technology for help. Just over 1/3 subscribe to a commercial online service (such as Prodigy, America Online or CompuServe), up nearly 2x from 1995; yet only 25% use e-mail (vs. 16% in 1995). Only 5% say that the internet is a key technology affecting their businesses. Nevertheless, 80% of small business owners utilize PCs and fax machines to improve productivity and customer service.
(Source: YOUR LINK HERE)
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COMPETITIVE ADVANTAGE SHIFTS IN GLOBAL MARKET
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BRITISH TELECOM FACES NEW COMPETITION
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GLOBAL -- An annual survey which ranks countries by their competitiveness indicates that Japan, Germany and Italy have become less competitive since last year. They now rank 11th (vs. 4th), 14th and 35th, respectively.
France remains #20 on the list; Russia is last, just after S. Africa. Only Finland moved up significantly.
(Source: YOUR LINK HERE)
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LONDON, UK -- In an effort to compete with British Telecom's dominance in the UK, Cable & Wireless plans to create the country's largest integrated telecommunications and television service, and has formed a company valued at around US$7.3 billion. This entity is a venture between Cable & Wireless' Mercury telecommunications division and 3 cable TV companies.
(Source: YOUR LINK HERE)
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ITALY COMMITTED TO SINGLE CURRENCY IN EUROPE
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CNN IS FIRST US NEWS ORG. IN CUBA
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ROME, Italy -- Italy became the first country to issue a bond denominated in euros, in its campaign to prove its loyalty to the cause of a single European currency. The 1 billion euro (US$1.2 billion) issue sold quickly.
(Source: YOUR LINK HERE)
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USA -- CNN became the first American news organization in 27 years to set up an office in Cuba.
(Source: YOUR LINK HERE)
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UUNET LAUNCHES WEB SERVICES ABROAD
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WORLD'S LARGEST FIBER-OPTIC CABLE LINKS US AND S. KOREA
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USA -- UUNET Technologies Inc., a unit of Worldcom Inc., announced plans to launch its Web hosting services in the UK and Germany and will expand soon throughout Europe, Canada, Australia, Japan and Taiwan. As part of this expansion effort, UUNET has purchased or bought a stake in several local service providers in a race to stay ahead in the fast-growing Web hosting market. Localizing Web hosting speeds internet service internationally, because it eliminates the delay associated with having to update
websites via crowded overseas network connections to the United States. UUNET's manager of business development expects their current US customer base and new US clients to account for 10-20% of their global business growth.
Web hosting companies are expected to post revenues of about US$170 million this year, nearly three times that of last year (US$60 million in 1996). Analysts project the business to reach US$5.3 billion by 2000.
(Source: YOUR LINK HERE)
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PUSAN, S. Korea and USA -- The world's largest undersea fiber-optic cable will be built to link Pusan and the United States via the Pacific Ocean. This is the eighth undersea cable network to go to S. Korea, but the first undersea telecommunications line to directly connect S. Korea with the US. The fiber-optic cable network is expected to greatly relieve communications problems between the two countries. Korea Telecom(KT) said that it will participate in the construction of the international fiber-optic cable network in a joint effort with the United States, Japan, China and Hong Kong. The cable network will be built to diversify international communications channels in preparation for the surging demand for international telecommunications in the Pacific region. The cable is scheduled for operation in 1999.
[Economic News]
(Source: YOUR LINK HERE)
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