Brasil Telecom

Brasil Telecom S.A., commonly abbreviated as BrT, was a major Brazilian telecommunications operator created during the privatization and breakup of the Telebrás system in the late 1990s. Its original corporate name was Tele Centro Sul, reflecting the license area it inherited and the central and southern Brazilian states it served. The company was headquartered in Brasília and operated across Acre, Rondônia, Goiás, Tocantins, Mato Grosso, Mato Grosso do Sul, Paraná, Santa Catarina, Rio Grande do Sul, and the Federal District. The company emerged as one of Brazil's principal fixed-line operators after the government divided the former state telecommunications monopoly into regional operating companies. In June 1998, an investment group associated with Banco Opportunity, Telecom Italia, Citigroup, and Brazilian pension-fund investors paid 2.07 billion Brazilian reais for Tele Centro Sul as part of the privatization process. The operator held a regional fixed-line concession and became one of the country's three principal landline companies, alongside the other regional operators formed from Telebrás. It also became the country's only long-distance operator in the post-privatization structure. Brasil Telecom broadened its business beyond traditional voice services as Brazilian communications markets changed. In 2001 it acquired a small interest in the iBest website and introduced an internet portal and free internet-access service. It later expanded into wireless communications, beginning mobile operations in 2004. Its broader portfolio included fixed telephony, long-distance calling, internet access, broadband, and mobile telephone services. Ownership and control were contested throughout much of the company's independent life. Opportunity had managed investment funds for institutions including Citigroup and Brazilian pension funds and initially played a central role in the company's control structure. Disputes between Opportunity, Telecom Italia, Citigroup, and the pension funds generated extensive litigation and eventually led to Citigroup and the pension funds taking control of the relevant investment vehicles in 2005, removing Opportunity from management. The conflict also intersected with disputes concerning Telecom Italia's relationship with Brasil Telecom and the acquisition of Companhia Riograndense de Telecomunicações, or CRT. Brasil Telecom was publicly traded in Brazil and had American depositary securities traded on the New York Stock Exchange. The company was included in Brazil's Ibovespa index during its listed period. In 2008, Oi announced an agreement to acquire Brasil Telecom. The transaction required a change to Brazilian telecommunications legislation because the rules then in force restricted a fixed-line company from acquiring another fixed-line operator in a different licensing area. After the legal framework was changed, Oi completed the acquisition on 9 January 2009. Brasil Telecom subsequently operated as an Oi subsidiary and ceased to exist as an independent telecommunications brand and corporate operator.

Brasil Telecom was created in the 1998 privatization of Brazil's Telebrás telecommunications system. The breakup divided the former state monopoly into regional fixed-line companies and separate long-distance and mobile operators. Brasil Telecom initially operated under the name Tele Centro Sul, a title associated with its central and southern service territory. Its concession covered Acre, Rondônia, Goiás, Tocantins, Mato Grosso, Mato Grosso do Sul, Paraná, Santa Catarina, Rio Grande do Sul, and the Federal District, with Brasília serving as its headquarters. In June 1998, an investment consortium connected with Banco Opportunity, Telecom Italia, Citigroup, and Brazilian pension-fund investors acquired Tele Centro Sul from the Brazilian government for 2.07 billion Brazilian reais. The new operator became one of Brazil's three principal regional landline companies and the country's sole long-distance provider in the structure established after Telebrás was dismantled. The company subsequently adopted the Brasil Telecom name as it developed a broader commercial identity. The operator initially centered its business on fixed-line voice and long-distance services, but the liberalization and digitalization of Brazilian communications encouraged it to enter adjacent markets. In 2001, Brasil Telecom bought a small stake in the iBest website and launched an internet portal together with a free internet-access service. In 2004, it started a wireless operation, extending the company into mobile telephony. Its resulting portfolio included fixed telephony, long-distance calls, internet access, broadband, and mobile services. Control of the company became entangled in disputes among Opportunity, Telecom Italia, Citigroup, and the Brazilian pension funds whose money was managed through investment vehicles associated with Opportunity. Brasil Telecom and Opportunity also commissioned Kroll to examine whether Telecom Italia had competed with Brasil Telecom in connection with Brasil Telecom's purchase of Companhia Riograndense de Telecomunicações from Telefónica. The conflict produced court proceedings and allegations that Kroll had conducted improper surveillance of Brazilian government officials. Separately, Opportunity faced legal disputes with Citigroup and the pension-fund investors. In 2005, Citigroup and the pension funds took control of the relevant funds and removed Opportunity from their management, ultimately depriving Opportunity of control over Brasil Telecom and several other portfolio companies. Brasil Telecom became a public company during this period. Its shares traded on the Brazilian BM&F Bovespa exchange, and its securities were also traded on the New York Stock Exchange. The company was included in the Ibovespa index, reflecting its importance within Brazil's listed market. Oi's proposed acquisition marked the final stage of Brasil Telecom's independent history. The transaction was announced in 2008 but required legislative changes. Brazilian rules at the time restricted a fixed-line operator from purchasing another fixed-line operator located in a different license area. Once the legal framework was amended, Oi completed the transaction on 9 January 2009. Brasil Telecom became an Oi subsidiary and was subsequently integrated into Oi's operations, ending its existence as an independent telecommunications company.

1. 2009Oi completes the acquisition

   Oi completed the acquisition on 9 January 2009, making Brasil Telecom a subsidiary and ending its independent corporate operation.

   Source
2. 2008Oi announces acquisition

   Oi announced its planned purchase of Brasil Telecom, subject to changes in telecommunications law.

   Source
3. 2005Opportunity loses control of the investment structure

   Citigroup and Brazilian pension funds took control of their investment vehicles and removed Opportunity from management after extended disputes.

   Source
4. 2004Wireless service begins

   Brasil Telecom started a wireless communications operation, adding mobile services to its fixed-line portfolio.

   Source
5. 2001Entry into internet portals and free internet access

   The company acquired a small stake in iBest and launched an internet portal and free internet-access service.

   Source
6. 1998Tele Centro Sul is created through Telebrás privatization

   An investor group associated with Opportunity, Telecom Italia, Citigroup, and Brazilian pension funds acquired the regional operator from the Brazilian government for 2.07 billion Brazilian reais.

   Source

A major regional Brazilian telecommunications operator formed through the privatization of Telebrás, with a broad service portfolio spanning fixed-line voice, long-distance, internet, broadband, and mobile communications.

• Fixed-line telephone servicesFixed telecommunications1998

  Brasil Telecom's original and most established business was regional fixed-line telephony. The company inherited a large service territory from the Telebrás privatization and operated as one of Brazil's principal regional landline carriers.

• Long-distance servicesVoice telecommunications1998

  The post-privatization structure gave Brasil Telecom a national long-distance role in addition to its regional fixed-line concession. Long-distance calling was therefore a central part of its early telecommunications offering.

• Internet portal and free internet accessInternet services2001

  Following its investment in iBest, Brasil Telecom introduced an internet portal and free internet-access service in 2001, extending the company from traditional voice networks into consumer online services.

• Wireless and mobile servicesMobile telecommunications2004

  Brasil Telecom began wireless operations in 2004. Mobile service complemented its fixed-line business and reflected the company's effort to participate in Brazil's increasingly convergent telecommunications market.

• Broadband internetData telecommunications

  Broadband was part of Brasil Telecom's broader fixed-network and internet portfolio. It represented the migration of the operator's infrastructure from conventional voice connectivity toward higher-capacity data services.

• 2008Agree to be acquired by OiM&A

  Oi sought to acquire Brasil Telecom, but Brazilian telecommunications rules restricted one fixed-line company from purchasing another fixed-line operator in a different license area.

  What changed. Oi and Brasil Telecom proceeded with the acquisition plan while the relevant legislation was changed.

  Aftermath. The acquisition was completed on 9 January 2009, and Brasil Telecom became an Oi subsidiary.

  Source
• 2004Launch wireless communications serviceProduct launch

  The company was expanding from its regional fixed-line base into additional telecommunications segments.

  What changed. Brasil Telecom started a wireless service.

  Aftermath. Wireless communications became part of the company's multi-service portfolio before its acquisition by Oi.

  Source
• 2001Expand into internet services through iBestStrategy

  Brasil Telecom was seeking opportunities beyond conventional fixed-line voice services as internet use expanded in Brazil.

  What changed. The company acquired a small stake in iBest and launched an internet portal and free internet-access service.

  Aftermath. The move broadened Brasil Telecom's portfolio into online consumer services, although the available reference material does not provide subsequent performance figures.

  Source

• 2000Kroll investigation and surveillance allegationsControversy

  Brasil Telecom and Opportunity hired Kroll to investigate whether Telecom Italia had competed with Brasil Telecom during its acquisition of Companhia Riograndense de Telecomunicações from Telefónica. The investigation became part of the wider struggle for control of Brasil Telecom, and Kroll was accused of spying on Brazilian government officials.

  Source

• 2009Oi completes acquisition of Brasil Telecom

  Oi completed its purchase of Brasil Telecom on 9 January 2009, after the relevant legal restrictions had been changed. Brasil Telecom became an Oi subsidiary.

  M&ALeadership change
  Source
• 2008Oi announces the acquisition of Brasil Telecom

  Oi announced plans to acquire Brasil Telecom, a transaction that required changes to Brazil's telecommunications legislation because of restrictions on cross-license-area fixed-line acquisitions.

  M&ARegulation
  Source
• 2005Citigroup and Brazilian pension funds take control of Brasil Telecom investment vehicles

  After prolonged disputes involving Opportunity and the investors in its managed funds, Citigroup and Brazilian pension funds took control of the relevant investment structure and removed Opportunity from management.

  Leadership changeLawsuit
  Source
• 2004Brasil Telecom begins wireless operations

  Brasil Telecom launched a wireless service as part of its expansion beyond fixed-line telecommunications.

  Product launch
  Source

1. Brasil Telecom